Target’s first quarter sales fell short of expectations as the company struggles to regain momentum. The Minneapolis-based retailer now expects net sales to decline by a low single-digit percentage, reversing earlier hopes for a modest increase.
Comparable sales dropped 3.8% in the quarter ended May 3, exceeding Wall Street’s forecasts and raising doubts about CEO Brian Cornell’s ability to drive growth. The company faced several headwinds, including weak consumer confidence, tariff pressures, and fallout from its diversity, equity, and inclusion (DEI) policies.
Cornell acknowledged that the downturn was caused by an array of challenges, including fragile consumer confidence, reduced discretionary purchases, and public backlash over Target’s decision to scale back DEI initiatives. The company has lost share in many categories, with only a few showing gains.
Analysts say Target struggles to compete with competitors like Walmart, which have larger grocery operations that shield them from dips in discretionary spending. The company’s internal strain is growing, with signs of leadership shakeup and internal criticism over its handling of DEI policies.
Target has faced boycotts from both conservative and liberal groups due to its past stance on LGBTQ+ issues and recent scaling back of DEI initiatives. The controversy has resulted in a class-action lawsuit and damage to the brand’s reputation.
The company plans to introduce new items this summer, with prices starting as low as $1, in an effort to rekindle consumer interest. However, the prospects for recovery are uncertain, with many analysts warning that Target faces significant challenges in this environment.
Source: https://nypost.com/2025/05/21/business/target-lowers-outlook-after-sales-fall-3-8-amid-tariffs-dei-boycotts