Target’s recent financial results missed quarterly sales expectations and dropped its full-year forecast, as shoppers are continuing to purchase more of the necessities instead of discretionary items that the company normally sells.
The big-box retailer cut its full-year sales and profit expectations, falling in the mid-single digits, and offering a downward outlook despite economists’ updated outlooks and government data that shows signs of inflation cooling off.
Target’s second quarter earnings topped expectations but their inventory levels, merchandise mix and marketing have been struggling, as evidenced by their sharp drop in share prices this year. CEO Brian Cornell commented on their lower than expected sales, attributing it to the inflation of items like food, beverage and household essentials consuming most of the customer’s budget.
Cornell also admitted the company’s “negative reaction” to their Pride merchandise collection causing a “material impact on sales.” This has led to an uproar from constituents, and Target’s decision to remove some Pride merchandise out of concern for customer and employee safety, normalized their sales once again.
“As we look at the consumer landscape today, we recognize the consumer is still challenged by the levels of inflation that they’re seeing in food and beverage and household essentials,” he said. “So that’s absorbing a much bigger portion of their budget.”
BREAKING: I have obtained the internal email that @Target sent to their employees following the Pride month disaster that has caused them to lose $9B in one week, where is goes from standing with the “LGBTQIA+ community” to the anniversary of George Floyd lmfao. pic.twitter.com/GQVgrdmHDv
— Greg Price (@greg_price11) May 25, 2023
CNBC reported that the company has experienced stock falling 16 percent in 2023 and hit a 52 week low on August 15, 2023.
Target reports first quarterly sales drop in 6 years after ‘Pride Month’ disaster https://t.co/gruhnkMXSM pic.twitter.com/7gIuQIgI98
— New York Post (@nypost) August 16, 2023
Target said despite backlash they will continue to support cultural issues.
