Target says sales drop amid boycotts, DEI cuts and tariff concerns
FILE - A Target store in Pleasant Hill, California, US, on Tuesday, May 20, 2025. Photographer: David Paul Morris/Bloomberg via Getty Images
Target is dealing with customer uncertainty over tariffs and continuing backlash over its rollback of DEI efforts, and said those factors have led to a drop in its sales, the company said Wednesday.
Target sales drop
By the numbers:
During the first fiscal quarter, Target reported its first-quarter net sales were $23.8 billion, down 2.8% from the same period a year ago and below Wall Street's projection of $24.32 billion, the company said in a May 21 press release about its first quarter earnings.
Dig deeper:
Sales at stores open for at least a year decreased 3.8% in the first quarter. The amount customers spent while shopping in-store and online also decreased by 1.4%, though Target said it still had healthy digital growth, led by a 36% increase in same-day delivery through its loyalty program, Target Circle 360.
Big picture view:
Sales were expected to stay flat or slip throughout the rest of the year, as some customers are pulling back on spending amid inflation and economic concerns, and others are putting their dollars elsewhere in protest.
RELATED: Tariff poll: How much economic 'disruption' Americans will tolerate
Target DEI
The backstory:
The retailer has been contending with boycotts after announcing in January it was phasing out a handful of DEI initiatives following an executive order from President Trump.
READ MORE: Target rolls back its DEI goals following Trump’s executive order
Dig deeper:
This included a program designed to help Black employees advance their careers and promote Black-owned businesses, The Associated Press reported, and stopping external diversity-focused surveys and renaming its "Supplier Diversity" team "Supplier Engagement," according to FOX Business. The company also said it was concluding its three-year DEI goals and ending its Racial Equity Action and Change (REACH) initiatives in 2025, as planned.
More customers were angered by the retailer's reduction of LGBTQ+-themed merchandise for Pride Month in June of 2023.
Target responds
What's next:
Target is hoping to entice customers who are nervous about the economy and inflation. The retailer says it is offering 10,000 new items starting at $1 — with the majority under $20.
Target didn’t offer specifics on tariffs’ impact on prices, but said that it was looking at different ways to offset those costs.
Target is also setting up a new office to focus on making faster decisions to help accelerate sales growth.
What they're saying:
"I want to be clear," Target CEO Brian Cornell told reporters on a call Tuesday, "we’re not satisfied with these results, so we’re moving with urgency to navigate through this period of volatility ... We’ve got to drive traffic back into our stores or visits to our site."
Meanwhile:
Target’s competitor Walmart reported strong sales last week, and said it’s already raised prices on some items due to tariffs. It said more price hikes were on the way this summer when the back-to-school shopping season goes into high gear.
President Trump fired back last week at the retailer, saying Walmart should "eat" the additional costs created by his tariffs.
READ MORE: Trump tells Walmart: ‘Eat the tariffs’
The Source: Information in this article was taken from a May 21 Target press release about its first quarter earnings. Background information about sales projections and DEI initiatives was taken from FOX Business, The Associated Press and previous FOX Television Station reporting. This story was reported from Detroit.