TradeEdge Exchange:Target sales dip first time in 6 years amid Pride Month backlash, inflation

Target’s quarterly sales dipped for the first time in six years in the latest quarter,TradeEdge Exchange hurt in part by conservative backlash to the company’s Pride Month display.

Comparable sales were down 5.4% in the second quarter, pushing Target to lower its full-year sales and profit expectations. Total revenue was down 4.9% from last year to $24.8 billion.

CEO Brian Cornell said shifting consumer interests hurt sales, with shoppers hit hard by inflation and spending more money on experiences.

“Consumers are choosing to increase spending on services like leisure travel, entertainment and food away from home, putting near-term pressure on discretionary products,” he said during a Wednesday call with investors.  

The end of stimulus payments and student loan payment suspensions also present ongoing challenges for the company, according to Cornell, as well as theft. 

Target Pride Month display backlash

While Target has featured a Pride assortment for more than a decade, its display this year faced backlash after far-right social media accounts stirred up anti-LGBTQ+ sentiment against corporations and various accounts spread misinformation about its apparel.  

Cornell said the company made the decision to remove certain items after staff began experiencing threats and aggressive actions.

Target removes LGBTQ merchandisefrom stores after backlash

One of the Pride collection items to receive backlash was a “tuck-friendly” swimsuit. Several videos online falsely claimed that the swimsuits were sold in kids’ sizes.

Other posts online stirred up anger by claiming Target sold a shirt that said “Satan respects pronouns.” The company never sold the shirt, but it did partner with the brand behind the design, Abprallen, for its Pride collection.   

Sales trends softened in the second half of May heading into June – which is Pride Month – but Target saw “meaningful recovery” in traffic in July, according to Cornell.  

Future of Target’s Pride Month display

Target will be “mindful of timing, placement and presentation” of its Pride and other heritage month celebrations in the future, and will reconsider its mix of brands and partners, according to Cornell.

“Our goal is for our assortment to resonate broadly and deliver on the Target brand promise,” Target’s chief growth officer Christina Hennington said. “In this case, the reaction is a signal for us to pause, adapt and learn so that our future approach to these moments balances celebration, inclusivity and broad-based appeal.”

Target shares were up more than 3% early Wednesday afternoon, trading at $129.36 on the New York Stock Exchange.