Sales at Target fell more than expected in the first quarter, with retailers warning customers will slip for all of 2025, worrying about tariffs and the economic impact and pulling back spending.
Target also said the boycott of customers also caused some damage in the latest quarter. The company scaled back many diversity, equity and inclusion (DEI) initiatives in January after being attacked by conservative activists and the White House. Target’s Retreat has seen a reduction in Pride Month’s LGBTQ+-themed products in June 2023, making more customers angry and even more customers angry.
Sales fell 2.8% to $23.85 billion, short of the expected $24.233 billion Wall Street, according to Factset. Sales also fell from the company’s $245 billion reported in the same period last year.
Target cut its annual sales forecast on Wednesday. The company currently expects a 1% increase in sales in March, followed by a 2025 single digit decline.
Equivalent store sales from established stores and online channels fell 3.8%. This includes a 5.7% decline in store sales and a 4.7% increase in online sales. This will increase comparable store sales by 1.5% over the last quarter.
The number of online and physical stores transactions fell by 2.4%, while average tickets fell by 1.4%. Target said Tuesday that it cannot be reliably estimated the individual impact of each factor that has been hurting the business.
Recent results highlight the Target’s ongoing struggle in recent years to revive sales, particularly in fashion and home furniture, as competition becomes more intense with those of Walmart and Amazon. Target’s stock has fallen by more than 37% over the past 52 weeks.
Target’s rival Walmart reported strong quarterly sales last week. The country’s biggest retailer has already raised prices for some items due to tariffs, and said more price increases were ongoing as the return to school shopping season went high gear this summer. For example, a car seat made in China, currently on sale at Walmart for $350, would likely cost customers an additional $100, executives said.
Target did not provide details on the impact of fees on prices, but said it is considering various ways to offset these costs.
“We’re watching the competition,” Cornell told reporters. “We literally adjust weekly so we constantly adjust our pricing. Some are up. Some are reduced.”
Donald Trump’s threatened 145% import tax was reduced to 30% in a transaction announced on May 12th.
However, Americans were already pulling back their spending as they became increasingly uneasy about the state of the US economy. Companies such as toy maker Mattel, tool maker Stanley Black & Decker, and consumer product giant Procter & Gamble have announced plans to raise higher prices or prices due to the trade war kicked by the US.