On Wednesday, retail giant Target announced in its second quarter earnings report that it was reducing its sales and profit expectations for the remainder of 2023, due in large part to ongoing backlash over its promotion of LGBT-themed merchandise.
According to the Daily Caller, this marks the first decline in Target’s quarterly sales in the last six years. In May, the company unveiled a line of pro-LGBT merchandise that was explicitly marketed for children, including pro-transgender swimsuits. After launching over 2,000 different products for the campaign – including clothing, furnishings, and books – the company began actively scaling back the amount of LGBT merchandise following widespread condemnation and a consumer boycott.
“We continue to take a cautious approach to planning our business, and have therefore adjusted our financial guidance in anticipation of continued near-term challenges on the topline,” said Brian Cornell, chair and chief executive of Target, in the earnings report. “This approach, along with the long-term investments we’re making in our business and strategy, position us to deliver sustainable, profitable growth in the years ahead.”
“We anticipated some of the headwinds at play throughout the second quarter, including the continued pullback in discretionary spending,” said Christina Hennington, chief growth officer for Target, in the earnings conference call. “Other headwinds were incremental, including the strong reaction to this year’s pride assortment.”
The earnings report states that Target’s inventory at the end of the second quarter was 17 percent lower year-over-year, after a 25 percent reduction in categories considered discretionary. The overall quarterly revenue for the company came in at 4.9 percent lower than the same point last year, with $24.8 billion overall for the quarter.
Earlier this month, the conservative legal advocacy group America First Legal filed a lawsuit against Target and its board of directors, alleging that the company misled its investors and cost them billions in violation of its fiduciary duties. The lawsuit also states that Target’s Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Corporate Governance (ESG) initiatives further harm the company and the financial interests of shareholders.