Target is once again “revising” its outlook after finding sharply lower sales in the wake of boycotts over its policy of advertising a woke, LGBTQ agenda to children.
“Target said shopper backlash over its Pride Month collection, as well as cautious consumers, pushed sales sharply lower in the most recent quarter,” the Wall Street Journal reported on Wednesday.
Not only did Target find that its profits have declined in the current quarter, but the retailer has lowered its profits for the whole year.
As we navigate an ever-changing operating and social environment, we are applying what we learned,” Brian Cornell, Target’s longtime chief executive, said on a call with reporters, WSJ reported.
It is quite a dip, too. Over the last four quarters, profits fell from about three percent to less than one. But they are down six percent this quarter, almost wiping out all the profits from the previous four quarters.
Per the Journal:
Backlash surrounding the Pride collection ate into sales, particularly in June, after Target started selling the annual collection. Sales recovered steadily in July, Cornell said.
“Multiple economic crosscurrents are putting pressure on consumers,” he said.
At Target, shoppers continued to spend less on apparel, home goods and other discretionary items in the midst of high prices for food and other essentials. There were fewer discounts to drive shoppers to stores in the most recent quarter after Target discounted heavily to move excess inventory last year.
Target’s comparable sales, those from stores or digital channels operating at least 12 months, fell 5.4% in the three months ended July 29, worse than the company’s expectation for a low single-digit percentage decline. Executives said they couldn’t quantify the impact of the Pride collection backlash on comparable sales.
Target shares have fallen 16% so far this year. Its experience with its Pride collection exemplifies the cultural environment companies face when it comes to issues that could be perceived as controversial.
Target was surprised by the backlash because they have been selling gay-themed clothing lines to appease their gay shoppers for years.
In a statement to Reuters last week, the company said that due to “volatile circumstances” in its stores, it was removing items at the center of the “most significant confrontational behavior.”
In a May 24 memo to Target employees, which was obtained by Business Insider, Target CEO Brian Cornell said “one of the hardest parts” of its move to pull the merchandise was figuring out how that would impact the “wellbeing and psychological safety” of the LGBTQ community.
A boycott was far more effective than previous boycotts of Target attempted in the past. Therefore, like the Bud l:ight controversy, Target removed LGBTQ products from their shelves.
Post produced by iPatriot and Lidblog.
