Sales at Target stores continue to drop even as back-to-school shopping should normally boost sales. The controversial retailer’s sales tumbled significantly in the third quarter as many consumers rebelled against the LGBTQ-themed merchandise it displayed during pride month.
Critics have lampooned the retailer on social media for what they say is “begging” for shoppers to return. Target is currently running 20% off for teachers through the end of August and big sales targeting parents. It may be to no avail though the retailer continues to claim, without evidence, that the sales dip is solely because of the floundering economy.
“As we navigate an everchanging operating and social environment, we are applying what we learned,” Brian Cornell, Target’s longtime chief executive, told reporters on a call. “Multiple economic crosscurrents are putting pressure on consumers.”
Analysts say it wasn’t the economy. Sales dived in June after Target rolled out its pride collection, which featured pro-gender transition clothing such as a “tuck-friendly” swimsuit to obscure male genitalia and children’s items from a brand that sells Satanist-inspired products. Target was fully aware of brand Abprallen’s Satanist-inspired merchandise, some of which glorifies violence against alleged “transphobes,” when it approved the collaboration Target’s poor sales performance in July defied even company projections, clocking in at a 5.4 percent decline in the three months ending July 29.
In early June, Target’s stock was downgraded by JPMorgan, the largest bank in the United States. It was demoted from overweight, which means the broker has a positive outlook on the company’s prospects because of its current share price and that the stock is considered a strong buy, to neutral, which means the broker believes the investor should hold the stock because its price may not change.
“We continue to believe that the consumer is broadly weakening while the share of wallet shift away from goods (51 percent of sales) is ongoing,” JPMorgan analyst Christopher Horvers wrote at the time, according to “Market Watch.” The outlet said in June that Target stock’s downward trend since May had represented its longest losing streak in 23 years, according to its analysis of Dow Jones data. The company expects the sales drag to continue into the fourth quarter.
Target will continue to offer pride-month merchandise but will change the items on offer, Chief Growth Officer Christina Hennington said on the call. “You will see us celebrate pride, you will see us celebrate these heritage moments, but with these modifications,” she said.
In 2022, Target reported an annual $109 billion in total revenue, a 2.9 percent increase from the previous year.
–Alan Goforth | Metro Voice
Photo: Robert T Bell Creative Commons 2.0 license.