Target Corp. reportedly faced a significant financial setback, with its full-year revenue for 2024 down 0.8% from 2023 and a warning that February’s performance was “soft,” according to news reports.
This decline comes after civil rights leaders and advocacy groups called for a boycott during Black History Month in response to the retailer’s shift on diversity, equity, and inclusion (DEI) policies.
The company’s stock took a sharp hit in February, plummeting by $27.27 per share, resulting in a $12.4 billion loss in market value, The Charlotte Post reported.
The drop came on February 28, a day marked as the Economic Blackout, when many consumers chose to avoid shopping at stores that had scaled back their DEI commitments.
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Target was hit particularly hard, with foot traffic on the blackout day down 11 percent compared to the average number of visits on the preceding Fridays, according to location analytics firm Placer.ai.
“Black consumers helped build Target into a retail giant, and now they are making their voices heard,” said Benjamin F. Chavis Jr., president and CEO of the National Newspaper Publishers Association (NNPA). “If corporations believe they can roll back diversity commitments without consequence, they are mistaken.”
The drop in customer visits continued through February, with Target seeing four consecutive weeks of traffic declines from January 28 to February 17. While Placer.ai’s R.J. Hottovy cautioned that many retailers were experiencing foot traffic drops during this period, the sharp decline on February 28 was hard to ignore. In contrast, competitors like Best Buy, Starbucks, and McDonald’s saw traffic increases that day.
Target’s online presence was also impacted. Website traffic dropped nine percent on the day of the boycott, further highlighting the growing consumer discontent. Despite a Numerator survey showing that only 16 percent of Americans planned to participate in the national boycott, the retailer was disproportionately affected. Boycott calls are expected to continue, including a 40-day faith-based fast through Lent and another large boycott scheduled for June 3–9 organized by the People’s Union.
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Experts caution that while grassroots boycotts typically don’t have long-lasting effects on companies’ bottom lines, Target’s situation may be different.
“Boycotts put a ‘negative spotlight’ on the company that can have reputational consequences,” Brayden King, a professor at Northwestern University’s Kellogg School of Management, told USA Today. Consumer trust, which is closely tied to a company’s reputation, plays a major role in where people choose to shop.
Target’s reputation had already been damaged by similar controversies in the past. In 2023, the company experienced a dramatic drop in its reputation score after facing backlash over its Pride Month displays. The company’s reputation score fell from 76.9 in April 2023 to 60.9 in December 2023. This erosion of consumer trust was mirrored by a two percent revenue decline in fiscal 2023.
The company’s struggles continued into 2024, with full-year revenues declining one percent to $106.6 billion, down from $107.4 billion the previous year.
Looking ahead, Target is predicting flat comparable sales for fiscal 2025, with net sales growth expected to be around one percent. The company has cited ongoing consumer uncertainty and tariffs as factors that could influence its performance.
Despite these challenges, Target’s CEO, Brian Cornell, expressed confidence in the company’s ability to navigate difficulties. “Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter this year,” he said in a statement.
However, with net earnings declining by 20 percent in the fourth quarter, questions remain about the full extent of the impact of the boycott and DEI controversy.
As Target faces mounting pressure from both boycott calls and declining consumer confidence, it remains to be seen how the company will address these challenges in the coming months. With consumer trust at stake, the retailer’s next moves will be crucial in determining its long-term reputation and profitability.
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