11:14 AM EDT, 08/25/2025 (MT Newswires) -- BJ's Wholesale Club Holdings (BJ) faces pressure on H2 gross margins due to tariff costs, cautious consumer spending and efforts to hold down prices, Morgan Stanley said Sunday in a report.

Fiscal Q2 same-store sales rose 2.3%, falling short of the expected 3.2%, as solid gains in food and household items were offset by weaker sales in general merchandise, particularly in lawn and garden, the report said.

Investments to maintain competitive price gaps may weigh on earnings revisions in the near term, the report said.

Morgan Stanley reduced estimates for comparable sales to 3% from 3.2% in 2025 and to 3.6% from 3.7% in 2026, while adjusting its earnings forecasts to $4.34 a share from $4.29 in 2025 and to $4.69 from $4.81 in 2026.

Still, increasing e-commerce business and strong membership fee income "highlight the compelling long-term positioning of the club model," the report said.

Morgan Stanley cut its price target on BJ's stock to $115 from $125 and maintained its equalweight rating.

BJ's shares fell 1.3% in recent Monday trading.

Price: 95.89, Change: -1.22, Percent Change: -1.26