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Cnn
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The objective was already faced with a very public revolt of some of its most loyal customers. Now it’s a tariff warning.
The company said on Wednesday that sales had dropped in the last quarter, partially motivated by the customers’ backlash for Target’s reversal on diversity, equity and inclusion programs (DEI). Target has also reduced its directives while President Donald Trump’s prices increase the costs for the company.
Target sales in open stores for at least a year released 3.8% in the last quarter. Fewer customers visited Target and spent less when they bought. Target has also reduced its financial prospects, the problems of a target sign will not disappear quickly. The company expects sales to decrease with a low figure this year.
The company announced that it had created a “business acceleration office” to accelerate growth plans, and it has reworked its management team.
“We have faced several additional winds this quarter, including five consecutive months to decrease consumer confidence, the uncertainty concerning the impact of potential prices and the reaction to updates that we shared on (DEI) in January,” said the CEO of Target, Brian Cornell, during a call with analysts on Wednesday.
Cornell warned of “massive potential costs” of prices, but said that the retailer could compensate them by diversifying suppliers, adjusting products – and hiking, if necessary.
“We have many levers to use to mitigate the impact of prices and the price is the very last resort,” he said.
Target’s stock (Tgt) dropped 7% during trading before the market on Wednesday. Target’s action has decreased by 37% in the past year.
Cornell recognized in a recent e-mail to the staff that it was “a few difficult months” between the retail economy “big titles, social media and the conversations that may have let you ask”, Minnesota Star Tribune reported. (Target confirmed the e-mail to CNN.)
Cornell said Target’s culture and commitment to the staff had not changed.
“I recognize that the silence on our part has created uncertainty, so I want to be very clear: we are always the target in which you know and believe,” said Cornell.
Boycotts on the Target Dei reversal injured Target’s activities.
January 24, days in the presidency of Donald Trump, Target announcement He eliminated the hiring objectives for minority employees, ending an executive committee focused on racial justice and making other modifications to its diversity initiatives. Target said he had a new strategy entitled “belonging to The Bullseye” and that the company has remained determined to “create a feeling of belonging for our team, our guests and our communities”. Target also underlined the need to “stay in step with the evolving outdoor landscape”.
But the decision angry the supporters of diversity and inclusion policies, who felt blind by Target. Target had been a champion of diversity initiatives and LGBTQ rights. Online customers protested the decision of Target and Anne and Lucy Dayton, the daughters of one of the co-founders of Target, qualified the actions of the “A betrayal.”
Target faced a boycott of 40-day consumers during Lent led by Reverend Jamal Bryant, a prominent mega-church in the Atlanta region, above his Rollback Dei. The demonstrators stolen outside the headquarters of Target in Minneapolis and other black leaders such as the Reverend Al Sharpton supported boycott efforts.
Target suffered more pressure than other companies that overthrew Dei’s policies because Target had gone further in his dei efforts, and he has a more progressive customer base than these competitors.
On Wednesday evening, on CNN, Bryant said that even if Target was the first targeted company, it would not be the last. He said he was aware of more than 17 companies that made Dei ‘initiatives go back.
“Another company will come to the radar in the next two weeks,” he said.
The target was a Main advocate for Dei programs in the business world in the years after George Floyd was assassinated by police in the company’s hometown in Minneapolis in 2020. Target also spent years LGBTQ problems.
The prices and a slowdown in consumers put even more pressure on the target.
The chain stores more non -essential goods compared to competitors such as Walmart (Wmt)) and costco (COST)). More than half of Target’s goods are discretionary and are at risk while consumers reign in expenses.
About 50% of Target products are also imported from overseas, including around 25% of China, leaving Target in a “difficult position”, Steven Shemesh, analyst at RBC Capital Markets said on Wednesday.
Prices may force the objective to absorb additional costs, to harm its profits or to increase consumer prices.
Home Depot said on Tuesday that it planned to maintain most of its stable prices, despite the reduction of Trump’s prices. But prices can lead Home Depot to increase prices on certain items and completely eliminate certain product ranges.
Walmart Said last week that Trump’s prices are “too high” and that it will increase prices on certain articles, which caused a angry response from Trump.
“Walmart should stop trying to blame prices as a reason for increasing prices throughout the channel,” Trump said this weekend. “Between Walmart and China, they should, as they say,” eat the prices “, and do not charge for appreciated customers. I will watch, and your customers too !!!”
Ramishah Maruf of CNN contributed to this story.