Target’s Sales Slumped Following Pride Month Boycotts

Target’s second-quarter sales slumped following boycotts in May and June against its Pride Month collection from social conservatives, CEO Brian Cornell said on a call with reporters Wednesday.

Target's total sales slid 4.9% to $24.4 billion during the three months ended July 29 from $25.7 billion during the same time last year. Sales at stores open for at least a year, a key industry measure, declined 5.4% from last year, the retailer said in reporting its earnings report before the markets opened.

The company expects its sales to decline again this quarter, and has lowered its profit guidance for the year due to "continued near-term challenges," Cornell said in the company's second quarter earnings report.

Following the massive backlash against Target over its Pride Month merchandise, executives said they will still celebrate Pride Month next year but with a more focused line of products, according to the Journal.

“As we navigate an ever-changing operating and social environment, we are applying what we learned,” Cornell told reporters, according to The Wall Street Journal.

Despite the boycotts, Cornell said sales recovered steadily in July.

Conservative customers targeted Target over its Pride Month collection earlier this year, knocking down displays, threatening employees and organizing a boycott on social media.

Target’s stock took a more than 10% hit by the end of May due to the backlash, but recovered slightly. A lawsuit filed on behalf of a Target investor by America Legal First, a legal nonprofit co-founded by former Trump aide Stephen Miller, claims the retailer hurt shareholders by misleading them about the impact its Pride Month campaign would have on share prices. The suit alleges that the company lost $10 billion in market valuation between May 18 and 28 alone.

As of market close on Tuesday, Target shares have fallen 30% year-to-date. 

Economic conditions are also putting pressure on consumers — which has translated into weaker sales at Target, Cornell said. Shoppers spent less on apparel, home goods and other discretionary items as prices for food and other essentials remain inflated, the Journal reported. This was paired with fewer discounts bringing shoppers into stores after major price cuts last year to get rid of excess inventory.

"With the benefit of a much-leaner inventory position than a year ago, the team was able to quickly respond to rapidly-changing topline trends throughout the second quarter, while continuing to focus on the guest experience," Cornell said in the earnings report.