Target (TGT) Q1 Earnings Disappoint: Trump May Be Taking the Blame for Two Issues

TradingKey - On Wednesday, May 21, U.S. retail giant Target (TGT) reported weak Q1 2025 results and cut its full-year sales outlook, sending shares down more than 5% in pre-market trading.

The company reported net sales of $23.85 billion in the first quarter, a decline of 2.8% year-over-year and below the market’s expected $24.27 billion. Net income came in at $1.04 billion, up 10% annually, while EPS was $2.28, an 11.7% increase from $2.04 a year ago. Adjusted EPS was $1.30, slightly below expectations.

Key Financial Highlights of Target’s Q1 2025 Earnings, Source: Target

In Q1, comparable sales fell by 3.8%, with in-store comparable sales declining 5.7%, although online comparable sales rose 4.7%, offering a small bright spot in the report.

Target revised its guidance for fiscal 2025, now expecting a low single-digit decline in total sales, compared to its prior forecast of 1% growth.

Company executives attributed the slowdown to three key factors:

• Declining consumer disposable income
• Ongoing uncertainty around tariffs
• Backlash over the company’s decision to roll back diversity initiatives

Like other U.S. retailers such as Walmart, Target blamed the Trump administration’s new tariff policies for dampening consumer confidence. Rising prices have made shoppers more cautious, hurting overall spending.

In another controversial move earlier this year, Target rolled back its Diversity, Equity, and Inclusion (DEI) initiatives, aligning with President Trump’s early executive order to eliminate federal DEI programs. While several companies followed suit, Target faced particularly strong criticism.

This decision appears to have alienated certain customer segments, contributing further to the company’s sales challenges.

Target CEO Brian Cornell said the company is not satisfied with these financial results and is taking urgent action to drive traffic back to stores and online platforms to regain momentum.

On May 21, Target shares continued to weaken in pre-market trading, falling over 5% — and down nearly 27% year-to-date.