Target Boycott Is Working

News: Life and Family
by Aaron Maxwell  •  •  August 29, 2016   

CEO continues to deny sharp drop in sales is linked to controversial transgender bathroom policy

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DETROIT ( - Target's CEO admits sales have been bad, after second-quarter earnings reported a 10-percent drop in sales — but he's refusing to concede the massive boycott of his store over their revised transgender bathroom policy has anything to do with it.

Target is seeing the worst drop in traffic in several years, with a 2.2 percent decline during the May–July period, a Minneapolis-based retailer reported. It's the worst drop since the Great Recession of 2008–09 outside of the massive data breach in 2013, when hackers stole data from 40 million credit and debit cards. It also reported a drop in second-quarter earnings of nearly 10 percent, to only $680 million, lowering its sales estimate for the remainder of the year.

Target's loss in business began after it announced its new transgender bathroom policy earlier this year allowing men to use women's restrooms and vice versa, which inspired a massive boycott. More than 1.5 million people signed a petition pledging to stop shopping at Target.

Target announced August 17 that earnings fell 9.7 percent, from $753 million to $680 million. Sales were down 7.2 percent, from $17.4 billion to $16.2 billion, in a one-year period. Target's stock fell 6.4 percent, from $75.48 to $70.63 per share, and the retail giant now estimates adjusted per-share earnings for all of 2016 will be lower, in the range of $4.80 to $5.20, down from $5.20 to $5.40.

Target Chief Financial Officer Cathy Smith is essentially conceding the power of the boycott, stating, "Clearly traffic was our single biggest issue, and our number one challenge" — meaning fewer people are visiting the store and shopping there.

Target's CEO Brian Cornell, on the other hand, refuses to acknowledge a link between dissatisfication with his transgender bathroom policy and impact on earnings. Although he has acknowledged that "our No. 1 challenge was traffic," he went on to say, "To date, we have not seen a material or measurable impact on our business. Just a handful of stores across the country have seen some activity and have been impacted."

But the American Association of Families (AFA), which started the boycott petition, begs to differ. "After seeing Target's latest-earnings report, the retailer can't afford to have millions of families shopping with their competitors," said AFA president Tim Wildmon.

Target executives have blamed the falloff in business on not having an in-store pharmacy, since they sold it to CVS. They have also blamed the decline on people's lack of interest in buying Apple products, which have slumped more than 20 percent. Additionally, the poor showings have also been blamed on having more items in their grocery department that shoppers are unaware of.

The cold weather has even been blamed as a culprit — in spite of the fact that the dramtic decrease in traffic took place in the late spring and summer. Cornell commented, "It's been a very wet and cold start to the year and it's reflected in our sales." He added, "We haven't seen anything from a structural standpoint that gives us pause."

Walker Wildmon, assistant to the AFA president, remarked at the time the quarterly earnings were reported, "We're confident that our boycott has played a significant role in Target's financial results that came out today."


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