Buckle (BKE) Q2 gross margin is likely to deteriorate as sales growth slows and costs remain elevated, UBS Securities said in a Monday report. The Q2 results are due Aug. 21.

The report said the outcome is largely expected by the market.

The note said the company will likely experience merchandise margin compression and occupancy cost deleverage given its decelerating sales trend amid persistent cost headwinds.

The report also pointed to some see downside risk to the firm's 2026 gross margin due to rising freight rates and fuel surcharges based on conversations with investors.

UBS cut its 2026 through 2028 EPS estimates by about 1%, lowered its price target to $46 from $47 and kept its neutral rating, expecting the stock to perform in line with peers.

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