200 Days Without DEI, Financial Impact Grows

Target’s January decision to end its DEI programs has triggered one of the most sustained corporate boycotts in recent memory, one that’s only broadened over time. Earlier this month, both the American Federation of Teachers (AFT) and the Chicago Teachers Union joined the boycott, which was spearheaded earlier this year by Black clergy and has garnered support from civil rights organizations, including Al Sharpton’s National Action Network and the National Newspaper Publishers Association, which represents the Black Press of America.

The company has been hit hard, reporting comparable sales declines for two consecutive quarters (3.8% and 1.9% in the first and second quarters of this year, respectively). In August, Target’s foot traffic, which has dropped in each of the last seven months, was down 3.3% year over year (YoY). Meanwhile, rival Costco Wholesale Corp.’s (COST) August foot traffic was up 5.2% YoY.

Why Shoppers Turned on Target

The Minneapolis-based retailer announced its DEI rollback just days after President Donald Trump’s inauguration, ending programs aimed at supporting Black employees in their careers, improving the experiences of Black shoppers, and promoting Black-owned businesses. While Target stated at the time that some of these programs had reached their natural conclusion, its “Belonging at the Bullseye” program, unveiled last year, removed specific goals for diversity while maintaining vague commitments to inclusion. Target suggested its moves were necessary to remain “in step with the evolving external landscape,” according to a company memo.

Unlike past corporate controversies that faded within weeks, the backlash against Target’s DEI pullback, dubbed #TargetFast, has maintained momentum for over 200 days. Led by Jamal Bryant, senior pastor of the 16,000-member New Birth Missionary Baptist Church in Stonecrest, Georgia, and a prominent civil rights leader, the boycott began as a 40-day “Target Fast” during Lent.

Asked by the PBS News Hour about the group’s focus on Target, Bryant said, “After the inauguration of President Trump, 23 corporations backtracked away from diversity, equity, and inclusion, and we thought it prudent to just go after one at a time.” Noting that Blacks spend more than $12 million a day at the company’s stores, “We thought that the one that was the most trafficked should be the focus of our media attention,” he said.

In announcing that the AFT would join Bryant’s effort, president Randi Weingarten said, “We rarely engage in this type of action, but we’re doing so here because…Target rolled back promises to help the people who have been loyal customers, because of a president who is trying to roll back history and ignore the struggle for freedom and justice. Those customers, who have helped Target’s bottom line, now feel set aside.” (Investopedia reached out to Target for comment but did not receive a response by publication time.)

The Boycott’s Demands

#TargetFast has four demands, with a deadline of this December:

1. Provide $250 million to Black-owned banks to expand access to capital for homeownership and entrepreneurship.
2. Adopt six historical Black colleges and universities with business programs to help students learn how to scale big-box businesses.
3. Honor Target’s $2 billion commitment to Black entrepreneurs, pledged after George Floyd’s murder in 2020.
4. Reimagine DEI rather than abandoning it.

“I understand the pressure and the weight of this Trump administration, so if [Target has] to pivot and package it differently, I’m amenable,” Bryant told the Guardian. “Even though Black people lag behind, we have demonstrated … a willingness to serve the greater good.”

Sales, Stock, and Foot Traffic Take a Hit

When Target reported $23.85 billion in first quarter sales, it missed analyst expectations by nearly $500 million. Foot traffic has declined for 11 straight weeks, with Placer.ai data showing consistent year-over-year drops since the boycott began.

In addition, the company’s comparable sales in the second quarter fell 1.9%, with both transaction frequency and spending per visit declining. Operating income dropped by a fifth (19.4%) to $1.3 billion in the second quarter, while earnings per share fell about 20% to $2.05. The company now projects a “low-single digit decline” in sales for this fiscal year.

Meanwhile, Target’s market capitalization, which had declined from about $129 billion in 2021 to $61.3 billion just before the boycotts began, is now at around $41.6 billion. Annual revenue projections indicate that Target will earn $106.6 billion this year, down from $107.4 billion in 2024.

Adding to the financial pressure, shareholders, including the City of Riviera Beach Police Pension Fund, have filed a class-action lawsuit alleging that Target misled investors about the financial risks of scaling back DEI programs. The lawsuit claims executives knew the rollback could trigger backlash but didn’t warn shareholders, potentially exposing Target to millions in settlement costs.

Target’s Leadership Shake-Up

Target’s January 2025 rollback places it among dozens of major corporations that have scaled back diversity initiatives over the last couple of years, including Amazon.com Inc. (AMZN), McDonald’s Corporation (MCD), Meta Platforms, Inc. (META), and Walmart Inc. (WMT).

Target came under more pressure than other companies that rolled back DEI policies, not just because Target had a more “progressive” image among consumers than the others, but because other companies reframed their diversity efforts in vaguer terms of “belonging” or made their changes through internal memos.

Cornell’s resignation in August after 11 years as CEO highlights the depth of Target’s challenges. His replacement, COO Michael Fiddelke, inherited a company struggling with more than just the DEI-related boycott. The Trump tariffs, a declining consumer base, and a broader economic slowdown have compounded the crisis. Meanwhile, if the company does reverse its DEI rollback, it could alienate conservative customers while failing to restore trust with boycotting consumers.

Bottom Line

The Target boycott demonstrates that reversing DEI commitments can carry consequences far beyond quarterly earnings reports. It also suggests a shift in consumer activism that companies considering similar reversals will have to weigh. 

“They’ve awakened a sleeping giant,” Bryant told the Guardian. “Black people are now alert, mobilized and conscientious about what’s taking place. And we’re not going to spend our dollars with companies that don’t treat us with dignity.”