Target Faces Sales Decline Amid Tariff Concerns and DEI Rollback Backlash
Minneapolis, MN – June 3, 2025 – Target Corporation has reported a notable decline in sales for the first quarter of 2025, with further decreases anticipated for the remainder of the year. The retailer’s net sales fell by 2.8% to $23.85 billion, missing Wall Street expectations and marking a drop from the $24.53 billion reported in the same period last year.
Comparable sales—a key indicator of retail health—declined 3.8%, driven by a 5.7% drop in in-store sales, despite a 4.7% increase in digital sales. The number of transactions across both online and physical stores fell by 2.4%, and the average transaction amount decreased by 1.4%. Foot traffic data from Placer.ai shows visits to Target stores down 4.1% year-over-year between Q1 2024 and Q1 2025.
CEO Brian Cornell attributed the downturn to a “highly challenging environment,” pointing to consumer caution amid economic uncertainty and the looming threat of new tariffs. “Massive potential costs” from proposed tariffs have pressured the company, though Cornell stated that raising prices would be only a last resort. The retailer now expects a low-single-digit decline in sales for the full year, revising its previous forecast from a slight increase to a decrease.
Adding to Target’s challenges, the company’s decision to scale back its diversity, equity, and inclusion (DEI) initiatives has triggered a consumer boycott, further eroding foot traffic and sales. Cornell acknowledged the backlash, noting a correlation between the DEI rollback and the financial downturn.
Despite these setbacks, Target reported a 10% increase in net earnings to $1.04 million, bolstered by gains from litigation settlements in the first quarter. The company’s guidance for fiscal 2025 now anticipates adjusted earnings per share of $7.00 to $9.00, down from previous estimates.
Analysts project total sales of $106.7 billion for the year, with earnings per share expected at $8.34. Target remains focused on enhancing its digital offerings and same-day delivery services, which have shown growth amid the broader sales decline.
As Target navigates a complex landscape of economic pressures, tariff uncertainty, and shifting consumer sentiment, the retailer is working to stabilize performance and regain customer trust.