Target says ‘negative reaction’ to ‘Pride’ merch contributed to first quarterly sales decline in years

During a Wednesday earnings call, Target addressed its first quarterly sales decline in years, attributing the drop, in part, to the “negative reaction” to its “Pride” collection.

Target executives stated that the controversy over its pro-LGBT collection contributed to a dip in sales during the second quarter.

Target CFO Michael Fiddelke noted, “Traffic and top line trends were affected by the reaction to our Pride assortment.”

The retailer faced boycott threats in May after it was revealed that the company was carrying controversial merchandise, including “tuck-friendly” bathing suits for biological males identifying as females, LGBT-related baby apparel, and clothing designs with satanic themes.

Target attempted to calm the blowback by moving the products away from the front of its stores. When that effort failed, the retailer announced that it would be removing some of the more controversial products from its stores altogether, citing allegedly “volatile circumstances” that impacted the safety of its employees.

The company faced pushback from those on both sides of the argument. LGBT activists accused Target of betraying the community and folding to “far-right extremists.”

In June, more than 200 LGBT organizations rallied to demand that Target restock the Pride merchandise and issue a public statement “reaffirming their commitment to the LGBTQ+ community.”

Earlier this month, a Target investor filed a lawsuit against the company over the “disastrous” backlash. The investor claimed the retailer failed to properly monitor the potential social and political risks when it decided to carry the controversial merchandise, causing investors’ stock value to drop significantly.

The pushback contributed to a $14 billion loss in Target stock. This week, company executives reported that the backlash also impacted the retailer’s sales for the past quarter.

The retailer’s earnings report revealed that its second-quarter comparable sales dropped 5.4%. Digital sales declined 10.5% over the same period, the report stated.

Fiddelke noted that it is impossible to know how much of the sales decline could be attributed to the LGBT merchandise. Target CEO Brian Cornell noted that “the impact of inflation” also contributed to the drop.

The CEO added that the blowback would not deter Target from celebrating Pride Month in 2024.

“Pride is one of many heritage moments that are important to our guests and our team, and we’ll continue to support these moments in the future,” Cornell said.

Cornell said the retailer plans to be “celebratory and joyous, with wide-ranging relevance” while being “mindful of timing, placement and presentation” of future Pride collections.

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