Note: This article should not be considered investment advise
Target stock just closed at $138.93. This is the lowest close since August 14th, 2020 when the stock closed at $136.53.
Target stores recently began promoting transsexual pride merchandise, some directly aimed at young children, in the front of their stores. This includes the now infamous “tuck-friendly” women’s bathing suit.
Many stores have now moved these displays to the back of some stores. Some locations may have removed them completely.
Part of the collection included items from British “fashion designer” Eric Carnell, who runs Abprallen. The items sold at Target are called the Abprallen X Target collection. Among other things, Abprallen sells t-shirts that say “Satan Respects Pronouns.” Some of Carnell’s items have been completely pulled by Target. However, Carnell seems to be cashing in anyway because major media outlets are promoting his Etsy store.
Target stock, traded as TGT on the NYSE, has seen seven straight days of major declines. Even though the S&P 500, the Russell 2000, and the NASDAQ 100 are all up during the same period.
Today, May 26th, the stock had its worst close since August 14th, 2020.
On May 16th, Target issued a $1.08 stock dividend. Then, on May 17th, they posted Q1 2023 earnings of $2.05 per share. Target has a rock-solid history of being profitable, as well as a solid history of paying quarterly dividends like clockwork.
During the Q3 2022 earning call, Target announced its twenty-second consecutive quarter of sales growth. However, the growth of digital sales had slowed to almost zero. At this time, Target was also issuing guidance that sales and profit margins were being impacted by inflation.
For Q1 2023, online sales growth was negative. While there was a tiny increase in sales at the counters, this is only because of new stores opening. Sales at existing stores were flat.
It must be noted that TGT went on a massive plunge at this same time last year after their Q1 2022 earnings call. However, there are two significant differences. The entire stock market was plunging at the same time. Also, this occurred on the heels of TGT having a wild ride during the second half of 2020 and the first half of 2021. This plunge could be considered a natural correction to a more reasonable stock price. Lots of stocks went bonkers after the Covid lockdown crash and then went through major corrections in 2022.
Also, Twitter’s stock has tended to surge and fall before and after each dividend. However, this time, there was not much of an uptick before the dividend.
Target experienced years of rapid growth, and it has finally stalled. Investors are undoubtedly reacting negatively and dumping the stock. Target picked the absolute worst time to launch their nationwide campaign of promoting transsexuality to children.
The backlash has undoubtedly made things worse for the stock. However, we will know just how big the backlash really is in August when Q2 2023 earnings are posted.