Target Bet Against DEI and Lost. Why Are They Doubling Down?
Four months of data show what happens when corporate neutrality becomes a public spectacle
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The Target app has lived on my home screen for the past 16 months. With twin toddlers, we’ve relied on Target for everything from diapers to formula. At times, deliveries from Target were a daily ritual. Yet, we haven’t purchased a single product from Target since early 2025, when the company publicly rolled back its diversity, equity, and inclusion (DEI) initiatives amid a wave of politically-fueled anti-DEI backlash.
I don’t typically believe in boycotting brands. Trying to impose personal morality onto purchasing decisions in a free-market capitalist system is like playing a hellish game of consumer whack-a-mole. It’s exhausting, messy, incomplete, and more likely to make you feel better than actually make a difference. So, the idea of boycotting Target wouldn’t normally have been something that piqued my interest.
However, this moment and this political environment feel different.
In January, Target announced it was ending its Racial Equity Action and Change (REACH) initiative and restructuring its Supplier Diversity program, rebranding it as "Supplier Engagement," moves that marked a significant rollback of its previous $2 billion DEI investment and commitments. The company also ceased tracking DEI hiring goals and withdrew from third-party DEI rankings, stating in its public message that it remained committed to fostering a sense of belonging and inclusion, but was shifting its approach to focus on "neutrality."
This was widely seen as a capitulation to anti-DEI activists and a reversal of the commitments Target made between 2020 and 2022, including its pledge to spend $2 billion with Black-owned businesses by 2025, as well as its public support for Pride merchandise and events.
Like any high-profile organization openly and brazenly changing their policies in public, Target made a bet: that the benefits of a high-profile retreat from engaging in “divisive social debates” would outweigh the costs.
Four months in, that bet has been an unequivocal loser.
Target stock is down.
Target’s stock is down 17% since the beginning of February, in stark contrast to peers like Walmart, whose stock is down only 3% over the same period, and Costco, whose stock is up 2% during that time.
Target’s sales are down.
Target’s sales in the first quarter of this year are down nearly 3% from the same quarter last year, one of only a handful of quarterly declines in the past decade. Comparable store sales, those from established stores and online channels, fell 3.8%.Target’s in-store foot traffic is down.
According to Placer.ai, foot traffic at Target stores dropped 8% year-over-year in March and April 2025, compared to a 1% decline at Walmart and a 2% increase at Costco.
Target admits that the blowback has hurt the business.
If the hard numbers weren’t convincing enough, Target officials have acknowledged that their rollback of DEI policies has hurt the business. Target’s CEO and Chief Communications Officer, among others, have directly linked sales declines to the consumer boycotts and backlash, alongside broader economic pressures such as tariffs. Target’s stock dropped by 12% after the announcement of the DEI rollback, and the company revised its annual sales and earnings projections downward, citing the backlash as a contributing factor.Target has met with civil rights leaders and activists advocating against it.
In an attempt to undo some of the damage, Target’s CEO met with civil rights leaders Rev. Al Sharpton and Rev. Jamal Bryant in New York to address concerns over the company’s rollback of DEI initiatives. The meeting followed mounting criticism and a boycott campaign led by Bryant and supported by Sharpton. Bryant demanded that Target recommit to supporting Black communities and invest in Black-owned businesses, while Sharpton warned he might support a boycott if sufficient action was not taken. Bryant said the meeting failed to fully address concerns, and calls for a boycott continued. No new DEI initiatives were announced.Investors have filed lawsuits against Target this year following its rollback of DEI. The most prominent case was a class action lawsuit filed by the City of Riviera Beach Police Pension Fund alleging that Target misled shareholders by failing to disclose the financial and reputational risks associated with ending its DEI programs. The lawsuit claims that Target’s leadership concealed the potential for consumer boycotts and stock volatility, resulting in significant financial losses for investors after the company’s stock price dropped sharply.
I’m not a gambler, but I’m in the business of making calculated bets. In either case, it’s vital to know when it’s time to cut your losses and admit you were wrong.
In a political and social climate where people are desperate for institutions to show courage, a full-throated apology from Target could not only undo some of the damage done to its brand and business but could position the company as a hero in this moment by acknowledging its mistake and embracing the offended and affected communities. In a world where people love a comeback, such a move could be a masterstroke.
Yet, from all appearances, Target seems to be doubling down on its stance.
No public rollback of the DEI policy change
As of early June, Target has not reinstated any of its discontinued DEI programs or positions. The company’s official website and press releases make no mention of plans to revisit its February decisions.Anti-DEI personnel moves
In May, the company involuntarily terminated two executives who had been prominent supporters of DEI initiatives: Amy Tu, the Chief Legal and Compliance Officer, and Christina Hennington, the Chief Strategy and Growth Officer. Tu, who joined Target less than a year ago, had spoken publicly about her commitment to DEI, shaped by her own experiences with discrimination. Hennington, a 21-year Target veteran, was instrumental in launching the company’s $2 billion initiative to support Black-owned businesses and was a founding member of its Racial Equity Action and Change committee. Target has not elaborated on the reasons for these departures, categorizing them as “involuntary termination without cause,” and announced the creation of a new "enterprise acceleration office" to focus on operational efficiency.
Target isn’t a startup dealing with its first PR crisis. Target’s CEO and board have over 100 years of combined retail experience and deep expertise across retail, healthcare, logistics, consumer goods, and technology. And Target also isn’t denying its current reality. The company has acknowledged the blowback and its effect on the business.
So what am I missing?
Putting myself in the shoes of Target’s leadership, I have to imagine they believe some combination of the following:
Corporate neutrality is the safest long-term bet,
A policy reversal would do more harm than good,
The backlash is small compared to bigger business issues, or
A more meaningful activist-led governance is a real possibility
Let’s explore each one:
Target believes corporate neutrality is the safest long-term strategy.
Target’s leadership has repeatedly stated that the company is “creating inclusive work and guest environments that welcome all.” The most likely scenario is one in which Target management decided to eliminate its public political stances and public support of social causes of all kinds. Frankly, this is the most honest approach. After all, any public support of social causes by corporations is publicity theater. Perhaps Target calculated that the short-term cost and brand damage of corporate neutrality will eventually be worth the long-term benefit of escaping the volatility of politics.That’s a reasonable position and one many organizations are taking, albeit much more subtly. Companies such as Amazon, Google, IBM, and Gannett, along with numerous other corporate giants, have scaled back or restructured their DEI initiatives by reducing public commitments, removing DEI language from reports and websites, consolidating or renaming executive roles, and discontinuing specific programs, all without making high-profile announcements. Even Walmart, a direct competitor that is beating Target in all the aforementioned categories, quietly rolled back DEI efforts.
If Target wanted to exit the political arena, its biggest mistake was choosing to do so loudly instead of quietly. A quiet exit would have the same long-term outcomes, however that plays out, but would have likely mitigated the short-term damage they are experiencing now.
Internal data, or recent history, indicates that reversing course would cause more damage.
Maybe Target believes that a public apology and reversal would provoke backlash from a different segment of their customer base, or that it would invite regulatory or political scrutiny. This isn't Target’s first brush with political backlash. In 2023, the company’s Pride Month merchandise sparked boycotts and threats from conservative groups. Target responded by removing some Pride items from stores and relocating displays, which led to criticism from both conservatives and LGBTQ+ advocates. The controversy contributed to a more than 5% drop in quarterly sales and a 15% decline in Target’s stock price during that period.Target was already underperforming, and recent post-DEI issues are part of a more persistent set of struggles. Target’s issues predate its recent DEI repudiation. In the last year, Target stock has declined by nearly 40%, with several factors contributing to this decline, including shifting consumer spending habits, increased competition, and self-inflicted issues such as understaffing and inventory problems. While it’s undeniable that recent policy changes have hurt sales, its recent troubles may pale in comparison to longer-standing management and governance issues.
Target fears a meaningful governance shake-up.
While Target stock has been down significantly over the last year, Walmart’s stock is up more than 50% and Costco’s is up nearly 30% over the same period. Such a divergence in price performance among competitors is a breeding ground for activist investors to intervene. Whether DEI-related or not, I could easily imagine an activist hedge fund quietly preparing to pounce on a business that has dramatically underperformed competitors with seemingly equal or lesser brands. It’s easy to imagine that investor input is shaping their decision-making in one way or another.
Target's biggest mistake wasn't necessarily retreating from DEI but doing so loudly and publicly. While many competitors have quietly scaled back their DEI initiatives without fanfare, Target chose to announce its rollback with great visibility, turning what could have been a gradual policy shift into a public spectacle. The resulting four months of declining stock prices, falling sales, and ongoing boycotts suggest that corporate neutrality, while potentially a reasonable long-term strategy, requires subtlety to execute successfully. Target may ultimately prove right about the benefits of stepping away from politically charged social issues, but their theatrical approach has made them a lightning rod in ways that quieter pivots by competitors have avoided. Whether Target's bet on neutrality will pay off in the long run remains to be seen, but their execution has already cost them dearly in the short term.
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👋🏿 I’m Jamaal Glenn. I serve on boards to help organizations navigate growth, risk, and complexity with financial discipline and bold, future-focused strategy. My career spans $70 billion in capital markets and M&A transactions, venture capital leadership, and scaling technology and media businesses backed by luminaries like Eric Schmidt, Pierre Omidyar, and leading global family offices. I’ve chaired audit and finance committees and advised institutional investors deploying billions into cutting-edge sectors including AI, fintech, and digital infrastructure. As a Qualified Financial Expert, I bring not only deep capital markets and deal expertise, but also operational leadership—having built, scaled, and exited ventures, raised over $150 million from institutional investors, and helped shape the growth strategies of both startups and Fortune 500-caliber enterprises. I pair financial rigor with a governance mindset, positioning me to join—and ultimately chair—an audit committee while driving long-term value creation.