Shareholders of Target were in for another hit on June 12, with stocks plummeting by as much as 2 percent in Monday-morning trading as the backlash against the company continued due to its “pride collection” clothing lines. Having fallen by over 3 percent in Friday trading, the company has now lost over $15 billion in market value since mid-May, with shares falling from highs of $161 last month to lows of $125 on Monday.
Target’s market cap fell from $74 billion before the controversy to $58.61 billion on Friday, according to Dow Jones Market Data Group.
Fox News Business reported that the controversy first unraveled when conservatives were irked by Target’s displays, which featured items such as “tuck-friendly” women’s swimsuits. The company was subsequently confronted with outcries from the LGBT community when it removed the items ahead of “Pride Month.”
The stock price had dropped just over 3 percent last week after a gigantic fall of over 18 percent last month, marking the company’s biggest loss in three years.
Most recently, a downgrade from Citi analyst Paul Lejuez lowered the stock from buy status to neutral. Lejuez noted that Target’s rival Walmart would likely see an increased market share as a result.
“We believe Walmart is likely to continue gaining market share, and Target’s high exposure to discretionary sales will not serve them well in the current macro backdrop,” Lejuez wrote. “Despite the recent stock pressure, we cannot recommend investors buy the stock given these dynamics and now believe the risk, reward is more balanced, but risk is more to the downside near term.”
Lejuez also pointed out a near 14-percent drop in store traffic in the last week of May, which he said was likely due to inflationary pressures overwhelming consumer spending.
According to the New York Post, KeyBanc Capital Markets cut the retailer’s shares on June 5 from a high-performance “overweight” rating to a lower-expectancy “sector weight” status.
To compound the situation, the resumption of student loan payments stipulated by Congress’ recent debt ceiling agreement reportedly poses a sizable headwind for discretionary consumer spending.
JPMorgan Chase also downgraded Target’s stock last week. According to its analysts’ predictions, the possibility of a decline in sales is likely due to consumers reduced spending in light of on-going and persistent inflation, the New York Post reported.
According to Fox News, Target confirmed last month that it is making adjustments to its “pride” merchandising plans after apparently rolling back displays from some stores.
According to insider information shared with Fox News Digital, the company ordered LGBT pride merchandise to be moved to less visible locations following customer outrage—and to avoid a potential “Bud Light scenario.”
Target’s purported “rainbow capitalism” was also criticized by LGBT advocate Heather Hester last week, who said that the company’s actions had been shown to be financially motivated.
“Really what Target ultimately did was show that they were in this just for the money. Rainbow capitalism is essentially, you know, selling Pride products for profit and not necessarily standing behind the community with support. That’s what happened, right? There are a lot of things that go into that, but that is what happened at the end of the day,” Hester told Fox News.
Target has been supportive of the LGBT pride movement for years, however. Merchandise sold this season included items labeled as “Thoughtfully fit on multiple body types and gender expressions.”
Additionally, the company sold “Gender Fluid” mugs, a range of adult clothing with slogans such as “Super Queer,” and a “Grow At Your Own Pace” planter. The company reportedly further engaged in marketing controversial items for children, such as a coloring book that features same-sex couples kissing.
The retailer’s “pride” collection has also been separately linked to dubious designer Erik Carnell of Abprallen. Carnell, an outspoken Satanist, has promoted his own clothing line that features an array of questionable images and slogans, including occult imagery and messages like “Satan respects pronouns.”
