Target Sales into Rough Waters

Target Sales into Rough Waters

February 13, 2017

The NFL doesn't have to look far to see where this kind of political pigheadedness leads. For the last 10 months, the Target company has taken a beating on Wall Street for racing to embrace the transgender movement. The backlash for opening their fitting rooms and restrooms to anyone has been so severe that executives are scrambling to stop the bleeding. After 1.5 million Americans joined the Target boycott first launched by American Family Association, the company has been racing to make up the deficits -- not just in their bank account, but in the public trust.

After Christmas (and a slew of missed projections), executives went back to the drawing board. Two months into the New Year, nothing is working. In fact, the situation is so dire for the retailer that they've had to call off a major expansion in sales. "Target announced the end of two projects as the stock price hit $64.77 at market close on February 8. That's down from $83 when the boycott began once the company made its transgender policy change on April 19. The stock price drop has slashed roughly $10 billion from the company's value on Wall Street." The closure was so unexpected, Breitbart explains, that it "even caught the project's manager by surprise." Although the company tried to pass it off as a "normal ebb and flow of business," the reality is that they have nothing but their controversial bathroom policy to blame.

And financial experts agree. At Cabot Wealth Network, Crista Huff couldn't believe the company didn't know better than to pander to a tiny vocal minority. "I immediately knew that Target's revenue would drop because its customer base would become disenfranchised. How did Target's management team not know this?" What's more, this excuse that all of the retailers going through tough times is exactly that -- an excuse. Stock analysts point out that "Target's same-store sales fell 1.1 percent in the second quarter, while Wal-Mart's comps rose 1.6 percent... If you take 1.5 million people's consumer dollars away from Target, and direct most of those dollars toward their obvious rival, Wal-Mart, then yes, Wal-Mart is going to have an upside surprise in quarterly sales while Target's numbers disappoint." The takeaway? Well, Huff says, "My recommendation is that shareholders sell [Target] stock and reinvest their capital into the stock of a company with strong earnings growth" – and, we would add, stronger values!

Tony Perkins' Washington Update is written with the aid of FRC senior writers.

Also in the February 13 Washington Update:

Trump Washes His Hands of Bathroom Order

NFL Tries to Down Privacy Bill by Contact

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