Last week JP Morgan downgraded their outlook for Target as the retailer continues to suffer through its longest losing streak in 23 years.
Target Downgraded After Boycott of Pride Campaign
JP Morgan downgraded the retailer’s stock to “Neutral” from “Overweight” in a Thursday note as it highlighted the host of challenges Target is facing. JPMorgan also slashed its price target to $144 from $182.
Shares, nearing a three-year low, are on pace for the longest losing streak in 23 years, and headed for a 10th straight session of losses, approaching a three-year low of $126.75.
JPMorgan’s decision to downgrade Target signals increasing worries about the retail giant’s ability to maintain its strong position in the market.
“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work. Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior. Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”
Target and Its Pride Merchandise Controversy
Target has struggled with backlash from its Pride merchandising marketing campaign which offered merchandise that included female-style swimsuits that have the option to “tuck” male genitalia.
Other products were labeled as “Thoughtfully fit on multiple body types and gender expressions,” a “Gender Fluid” mug, and a variety of adult clothing with slogans such as “Super Queer” among other items.
After shoppers found out that Abprallen’s designer Erik Carnell, who designed the pride collection for Target, was an outspoken “Satanist” whose brand features occult imagery and messages like “Satan respects pronouns” on brand apparel, some parents began shopping somewhere else.
Carnell told Reuters that his “brand’s products are the only ones so far that have been removed both in-store and online.”
Target responded to the widespread backlash by moving some Pride products to less prominent sections of the store and removing other merchandise altogether. Carnell, claims the merchandise mentioning Satan is tongue-in-cheek.
Target, which has 1,948 stores, is a leading American general merchandise retailer and offers a variety of products across several categories, including beauty and household essentials (27% of fiscal 2022 sales), food and beverage (21%), home furnishings and decor (18%), hardlines (16%), and apparel and accessories (16%).
Support and Criticism of Target’s Pride Merchandise
Many people have criticized Target’s outspoken satanic children’s merchandise designer.
Some shoppers are boycotting the retail behemoth.
While others are unhappy about how some Target stores moved the pride displays to the back.
In response to the downgrade, Target may need to reassess its strategies and make necessary adjustments to address the concerns raised by JPMorgan.
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