BREAKING: Target reports first sales slump in 6 years, slashes projections, admits ‘negative reaction’ to Pride Month

The big-box store slashed its full-year sales and profit expectations, according to CNBC. Even with top economists throwing out concens over a recession and federal data suggesting that inflation is cooling down, Target offered a more pessimistic outlook for the remainder of the year.

The company predicts that there will be a mid single-digit decline in comparable sales for the full fiscal year and earnings per share to hover between $7 and $8. This runs counter to what is initially expected, which was a low single-digit decline to a low single-digit increase, putting earnings per share between $7.75 and $8.75.

However, CEO Brian Cornell said the company’s sales and store traffic was better in July. But he suggested the company might experience a slight decline as the school year comes around. Rising interest rates and elevated prices for basic items was also reported to be a contributor, per the report.

“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.”

Target experienced massive sales during the Covid pandemic, but they have not been able to return to those sales numbers since. Profits were affected by product markdowns and excess inventory. Much of the company’s sales is dictated by impulse-driven items, which has become a liability for consumers. The average consumer, according to the report, is focused more on needs rather than wants, putting excess money back for vacations and concerts.

The company’s challenge to win over consumers during inflation has adversely affected its stock. CNBC reported that its shares had fallen 16 percent so far in 2023, even as the S&P 500 had risen by 15 percent. Its stock price reached a 52-week low of $124.96 on Tuesday, almost half of what it was during the pandemic.

Target faced intense backlash in May and June over some of its Pride-themed attire, which resulted in a decline of sales. As a result, the company removed some of the items that were made available. However, Cornell said that the company “saw things normalize” after the items were removed. He also mentioned that a driving force behind removing said items was due to threats against employees.

The company will still have products that celebrate Pride month.