Target reported on August 16, 2023 that comparable sales fell 5.4% in the quarter ended July 29, and executives said the reaction to its Pride assortment was one factor. The same filing shows operating income rose 273% to $1.2 billion on a higher gross margin. The sources reviewed contain no Target figure for how much of the sales drop came from Pride, and its executives named other causes.
What did Target report for the quarter after the Pride backlash?
Target's results for the quarter ended July 29, 2023 showed lower sales and higher profit, according to the company's 8-K and 10-Q filings.
| Measure | Q2 2023 result |
|---|
| Comparable sales | Down 5.4% |
| Store traffic | Down 4.8% |
| Average transaction amount | Down 0.7% |
| Comparable store sales | Down 4.3% |
| Comparable digital sales | Down 10.5% |
| Total revenue | $24.8 billion, down 4.9% |
| Operating income | $1.2 billion, up 273.0% |
| Diluted earnings per share | $1.80, against $0.39 a year earlier |
Target attributed the profit increase to a higher gross margin rate: 27.0% against 21.5% a year earlier, reflecting lower markdowns, lower freight costs and retail price increases. Sales and profit moved in opposite directions in the same quarter.
What happened between the Pride rollout and the earnings report?
Target's Pride merchandise drew criticism from customers in May 2023, and the company changed where it sold some items before the quarter ended.
- May 24, 2023: Target said it would move Pride products away from the front of its stores, according to the Daily Signal.
- Safety reason: Target spokeswoman Kayla Castaneda said customers had confronted employees and thrown merchandise on the floor, the Washington Examiner reported.
- Product changes: Gay City News reported that some items drawing the most criticism, including swimsuits, were removed.
- Criticism from the other direction: California Governor Gavin Newsom accused Target's CEO of "selling out the LGBTQ+ community to extremists," the Daily Signal reported.
- August 16, 2023: Target reported the quarter's results and CEO Brian Cornell addressed the Pride reaction on the earnings call.
Target's response drew criticism from both directions: some customers objected to the merchandise, and some advocates objected to moving it.
How much of the sales drop did the Pride reaction cause?
The sources reviewed show no Target figure for the Pride effect, and its executives gave several explanations for the weak quarter.
- Pride reaction: Chief growth officer Christina Hennington said "the strong reaction to this year's Pride assortment" affected sales, according to the Daily Signal. CFO Brew reported that Cornell said same-store sales slipped in May and June and recovered in July.
- Discretionary demand: Cornell said consumers were spending more on services such as travel and food away from home, which pressured discretionary products, according to CNN Business as quoted by the Daily Signal. CFO Brew reported that apparel, home goods and hardlines declined while food, beverage and essentials grew.
- Theft: Cornell said thefts involving violence or threats rose 120% in the first five months of the year, according to CFO Brew.
The July recovery is consistent with a Pride effect concentrated in May and June, and it is also consistent with seasonal and spending shifts. The filings do not separate the factors, so this page does not assign a share to any one of them.
Did Target's sales recover?
Target's comparable sales were positive again by the second quarter of 2024. For the third quarter of 2023, the company guided to comparable sales in a wide range around a mid-single-digit decline, according to its 8-K. In the second quarter of 2024, comparable sales rose 2%, traffic rose 3% and earnings per share reached $2.57, Drug Store News reported. Target's later boycott, which followed its January 2025 rollback of diversity programs, and its 2026 recovery are covered in Has Target Recovered From the Boycott?
What can a brand take from the Target case?
A brand with a contested seasonal collection can take five points from the numbers Target disclosed.
- Decide placement and staff safety plans before launch. Target moved items after incidents with employees, and it made that change mid-quarter.
- Expect criticism from both sides of a reversal. Target faced objections to the merchandise and objections to moving it.
- Report causes separately. Target's own statements name Pride, discretionary demand and theft, and its results do not split them.
- Track sales by week against a prior-year baseline. Cornell's May, June and July pattern is the only timing evidence available, and it comes from a single remark.
- Read profit and sales together. Target's 8-K shows operating income up 273% in a quarter when comparable sales fell 5.4%.
Decision: before launching a collection likely to draw organized criticism, set the metric you will use to judge the reaction and the date you will review it.
For related reading, see EPR's analysis of Anheuser-Busch's $1 billion loss, the wider category in LGBTQ+ public relations, the Nike Dream Crazy case and marketing scandals from 2024 to 2026.
Sources
Target Corporation, Form 8-K and press release, August 16, 2023. Target Corporation, Form 10-Q for the quarter ended July 29, 2023. CFO Brew, August 17, 2023. CNN Business, via Daily Signal, August 2023. Gay City News, August 2023. Washington Examiner, August 16, 2023. Drug Store News, Target second quarter 2024 results.
