Target’s DEI Drama Costs Big As Boycotts Impact Sales

Retail giant Target revealed on Tuesday that customer boycotts damaged its sales in the first quarter, following the company’s January decision to scale back several diversity, equity and inclusion (DEI) initiatives.

Sales fell 2.8% from last year to $23.85 billion, below the $24.23 billion Wall Street expected, with Target now expecting a low-single digit decline in annual sales for 2025, a significant downgrade from its March projection of a 1% increase.

According to the company’s earnings report, “Comparable sales decreased 3.8 percent in the first quarter, reflecting a comparable store sales decline of 5.7 percent and comparable digital sales growth of 4.7 percent.”

Target, previously a staunch supporter of leftist causes, announced in January it would phase out several DEI initiatives after criticism from conservative activists and the White House.

Despite the reversal, the company continues to receive backlash from both the Right and the Left, with many conservatives arguing that the retailer’s retreat from DEI policies has come too late.

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In February, Target was hit with a class action lawsuit from shareholders who accused the retailer of misleading them about the risks posed by its DEI initiative, which the plaintiffs allege contributed to Target’s stock having plummeted more than 37% over the past year.

Rev. Jamal Bryant, who led a nationwide 40-day boycott of Target stores after the company ended DEI initiatives in “a spiritual act of resistance,” called for a continuation of that effort.

“We faced several additional headwinds this quarter, including five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs, and the reaction to the updates we shared on [DEI] in January,” Target CEO Brian Cornell said on an earnings call.

“I want to be clear that we’re not satisfied with these results,” Cornell added. “We’ve got to drive traffic back into our stores and visits to our site.”

The company faces additional challenges from potential tariffs on Chinese imports. While President Donald Trump’s threatened 145% tariffs were reduced to 30% in a May 12 deal, with some higher tariffs paused for 90 days, Target remains vulnerable due to its higher reliance on discretionary items compared to competitors like Walmart, according to the AP.

“We look at competition,” Cornell explained regarding potential price hikes. “We make adjustments literally each and every week, so we’re constantly adjusting pricing. Some are going up. Some will be reduced.”

The retailer operates nearly 2,000 stores nationwide with more than 400,000 employees, making its financial performance a significant indicator for the broader retail sector.

Out of 35 merchandise categories Target tracks, the company is currently gaining or maintaining market share in only 15, the AP reported.