Target Corp. announced it will add single-stall bathrooms to its stores following a backlash of its policy to let transgender people use the bathroom of the gender with which they identify.
The news came on the same day it cut its profit forecast and a key sales outlook Wednesday as it saw fewer customers in its stores and acknowledged it didn't push the second part of its "Expect More, Pay Less" slogan.
The Minneapolis-based discounter's second-quarter net income fell nearly 10 percent, though that was better than what most had expected. Sales at stores open at least a year fell 1.1 percent, reversing seven straight quarters of gains. Its main competitor, Wal-Mart Stores Inc., reports results Thursday.
Target's shares fell $4.74, or 6 percent, to $70.74 in afternoon trading.
Customer traffic fell for the first time in a year and a half as Target struggled to get its grocery offerings right and shoppers looking for deals on essentials like detergent were turned off. Other issues, both company-specific and industrywide, ranged from a lack of new electronics for sale and lingering disruptions caused by the sale last year of its pharmacy business to CVS.
Sales by markets also varied, with weakness on the East Coast but pockets of strength in California.
"Our No. 1 focus is driving traffic back to our stores and accelerating business to our site," Chief Executive Brian Cornell said.
Target joins retailers such as department store chain Macy's that are struggling with fewer customers coming in as shoppers buy more online. The bright spots in retail have been T.J. Maxx's parent company TJX Cos. and Home Depot as consumers look for clothing bargains and focus more on their homes.
Under Cornell, Target has been trying to reinvigorate itself restore its cheap-chic status after a series of headline-grabbing setbacks such as a 2013 data breach. It's focusing on categories like fashion, home furnishings and wellness products, creating vignettes featuring home products and launching the children's line Cat & Jack.
But striking the right balance between stylish clothing and bedspreads while offering toothpaste and detergent at good prices has been tricky.
"Our progress in apparel and home has been really significant," said Cornell. "And we've got to make sure we never lose track of the other side of our brand promise and that's the "Pay Less" side. And that's all about those core household essentials that we have to make sure are presented effectively."
To boost sales and traffic, Target plans to increase marketing for its essentials and work with key vendors like Apple to push more innovation and to also improve presentations. Apple product sales were down 20 percent and the electronics department was a "significant drag," Cornell said.
Target is still struggling, however, to reinvent its food section — an area where Wal-Mart is particularly strong. Grocery sales represent about 20 percent of Target's total business but it has seen disappointing results from perishables like fruits and vegetables.
Its nonperishable items have been doing well, and it's marketing more organic, natural or gluten-free products. Yarbrough noted that Target faces stiff competition on the low end from Wal-Mart, which is focusing on lowering prices further, and at the high end from the likes of stores like Whole Foods and others.
"Grocery is going to be more difficult to fix," said Brian P. Yarbrough, a senior analyst at the Edward Jones investment firm, which downgraded Target's stock to "hold" from a "buy" rating Wednesday. "They're not a destination for food. They don't offer a whole suite of products."
While nowhere near the online volume of Amazon, Target is expanding its online services. It's doubling the number of stores that will be used to ship products directly to online shoppers' homes, which will result in speedier deliveries. Online sales rose 16 percent in the second quarter, lower than the 23 percent gain in the first quarter.
Target also is spending to modify some stores after an outcry from some customers about its policy of allowing transgender customers and staff to use the bathrooms that identifies with their gender identity.
Chief financial officer Cathy Smith said the backlash hasn't had a "material" impact on sales, but some customers are still upset. "We are listening to our guests," she said. Target is investing $20 million in building single-stall bathrooms in stores.
Target reported net income for the quarter of $680 million, or $1.16 per share. That compares with $753 million, or $1.18 per share, a year earlier. Adjusted per-share earnings were $1.23, beating projections of $1.14 from Wall Street, according to a survey by Zacks Investment Research. Revenue fell 7 percent to $16.2 billion.
The company now expects earnings this year from $4.80 to $5.20 per share, lower than the $5.20 to $5.40 it had projected earlier. Same-stores sales could fall as much as 2 percent in the second half of the year, Target said.
-- Edited by Lawyerlady on Thursday 18th of August 2016 10:43:42 AM
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LawyerLady
I can explain it to you, but I can't understand it for you.
Kohl's quality of merchandise is low with few exceptions and the sales gimmicks are tiring. Unless you have a 30% off coupon you are overpaying. The clothing styles in the girls Dept are slutty.
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Sometimes you're the windshield, and sometimes you're the bug.
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
I used to go to Target when I lived near it and then the one by my office is nice. But I haven't needed anything from them in awhile. It's easier to click on Amazon.
I stop shopping there when they decided to let men use the same bathroom my granddaughter would use.
So did a lot of other people. They can blame the drop on a "poor retail environment" all they want, but when the percentage of swing between the Target drop and the Walmart increase is 18.3% - that's HUGE.
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LawyerLady
I can explain it to you, but I can't understand it for you.
That's the PC way of saying they screwed up with the bathroom thing.
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A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
That's the PC way of saying they screwed up with the bathroom thing.
And they still are. They are putting in a single stall bathroom for more than 99% of the population and leaving the rest open to people of the opposite sex. And this doesn't address the dressing room issue at all.
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LawyerLady
I can explain it to you, but I can't understand it for you.
I used to go to Target when I lived near it and then the one by my office is nice. But I haven't needed anything from them in awhile. It's easier to click on Amazon.
Truer words have never been spoken...
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America guarantees equal opportunity, not equal outcome...
I used to go to Target when I lived near it and then the one by my office is nice. But I haven't needed anything from them in awhile. It's easier to click on Amazon.
- FNW
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I think that last sentence has more to do with their financial troubles than the bathroom issue does. They probably gained just as much business as they lost over the bathroom debacle, because just as there are or were people boycotting them for it, there were surely supporters that wanted to show that support.
More and more people are on-line shopping for stuff that Target sells. It's getting to the point where it's really almost not worth it to go to a store for anything other than food.
Then why were Walmarts numbers up while Targets were down? I think it was the bathroom debacle because those of us who are pissed off about it went to Walmart instead. They are also spending a ton of money on new single stall restrooms so they obviously know it's hurting them. It won't help though because a lot of us will never shop there again.
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“Until I discovered cooking, I was never really interested in anything.” ― Julia Child ―
Then why were Walmarts numbers up while Targets were down? I think it was the bathroom debacle because those of us who are pissed off about it went to Walmart instead. They are also spending a ton of money on new single stall restrooms so they obviously know it's hurting them. It won't help though because a lot of us will never shop there again.
I think it also has a lot to do with Target's attempt to ramp up the grocery business and their placement of the grocery section. Walmart has the groceries in the middle, not far from the check out lines. Target, at least the few stores I've seen, have the groceries off on one side of the store and not close to the check out. It's an awkward placement at best.
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Sometimes you're the windshield, and sometimes you're the bug.
The Walmart I've been in, and we ALWAYS end up at a walmart no matter where we go, have grocery on one side, general merchandise on the other.
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A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
Then why were Walmarts numbers up while Targets were down? I think it was the bathroom debacle because those of us who are pissed off about it went to Walmart instead. They are also spending a ton of money on new single stall restrooms so they obviously know it's hurting them. It won't help though because a lot of us will never shop there again.
I think it also has a lot to do with Target's attempt to ramp up the grocery business and their placement of the grocery section. Walmart has the groceries in the middle, not far from the check out lines. Target, at least the few stores I've seen, have the groceries off on one side of the store and not close to the check out. It's an awkward placement at best.
All of our Walmart's actually have 3 entrances, depending on what you are going for - Groceries, General, and Garden. You don't have to go through the whole store if you are just wanting to pick up a few things. And Walmart is actually a FULL grocery store - most Target's are not. You don't go to Target for the purpose of grocery shopping, you just pick up things if you happen to be there.
But you can't tell me that over a 9% drop in income for Target with almost the same amount of increase in Walmart is a coincidence. Especially since the grocery thing has been that way for years - it's not new.
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LawyerLady
I can explain it to you, but I can't understand it for you.
I agree LL. I personally stopped shopping there when they chose to care more about the rights of a tiny fraction of the population than they did about the safety of women and children. I will never shop there again no matter how many kinds of bathrooms they build.
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“Until I discovered cooking, I was never really interested in anything.” ― Julia Child ―
I agree LL. I personally stopped shopping there when they chose to care more about the rights of a tiny fraction of the population than they did about the safety of women and children. I will never shop there again no matter how many kinds of bathrooms they build.
This adding family bathrooms thing is not sufficient - they need to change their policy related to dressing rooms and bathrooms, and make the single stall ones for those who need special accommodation. If they do that, I will shop there again. But, I'm not holding my breath.
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LawyerLady
I can explain it to you, but I can't understand it for you.
I was boycotting target but I buckled a couple weeks ago. I was looking for what is called maternity belly bands, and I couldnt find them anywhere else. So I went to target and got them. While there, I also saw a swimsuit I had been hunting for all over the internet for and couldnt find anyone that had it in stock. So I bought that as well.
Mine, too. The only thing I've bought is just enough to use up the gift cards I had. I figured not using gift cards was giving them my money, so I went and used them up.
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LawyerLady
I can explain it to you, but I can't understand it for you.
I was boycotting target but I buckled a couple weeks ago. I was looking for what is called maternity belly bands, and I couldnt find them anywhere else. So I went to target and got them. While there, I also saw a swimsuit I had been hunting for all over the internet for and couldnt find anyone that had it in stock. So I bought that as well.
I fail as a human being.
You fell off the wagon. Just get back on.
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LawyerLady
I can explain it to you, but I can't understand it for you.
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
Then why were Walmarts numbers up while Targets were down? I think it was the bathroom debacle because those of us who are pissed off about it went to Walmart instead. They are also spending a ton of money on new single stall restrooms so they obviously know it's hurting them. It won't help though because a lot of us will never shop there again.
- Tinydancer
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This is completely a guess: Walmart's numbers are up because their prices are usually lower than Target's. And, unlike Target, their "Grocery" section is equivalent to many full grocery stores.
I also could be wrong. Right now trans acceptance is at about 41% (that includes people that simply don't care one way or the other, according to a recent CBS poll). It's just a gut feeling I have that the bathroom thing basically balanced out; equally as many people for it started shopping there as those against it stopped.
We shop at both Wal-Mart and Target. At our Wal-Mart the groceries are on one side and there are actually four entrances. Three like LL said and then another in Tire and Auto. We always park there. We hate going there because we never leave without spending a ton of money. Target is more expensive on groceries and doesn't have nearly the same selection. Target is twice as far as Wal-Mart but we get our prescriptions there. They are a thousand times better than anyone else when it comes to that. We will pick up groceries when we go to get meds but not many. Usually it's just a few things. We have two Targets here and they have always had single stall bathrooms. Family stalls they are called. This just has never been an issue for us.
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“You may shoot me with your words, you may cut me with your eyes, you may kill me with your hatefulness, but still, like air, I'll rise!” ― Maya Angelou
Target had 2 more incidences in Texas of men filming girls in the dressing rooms. The Texas attorney general is calling on Target to change its policy.
As for the boycott update - it is still growing, it is now up to 1.42 million signatures. And the stock is back down below $70.
They are still trying to blame absolutely everything else for the slow down in business besides the boycott. It's their grocery prices, it's their store signs, etc.
I'll tell you this - I never had a problem with Target's prices, and I LOVED that their style was different than Walmart. I loved shopping at Target precisely because they are different than Walmart - turning themselves into Walmart is not going to work because then there is no reason to shop there instead of Walmart.
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LawyerLady
I can explain it to you, but I can't understand it for you.
Target had 2 more incidences in Texas of men filming girls in the dressing rooms. The Texas attorney general is calling on Target to change its policy.
As for the boycott update - it is still growing, it is now up to 1.42 million signatures. And the stock is back down below $70.
They are still trying to blame absolutely everything else for the slow down in business besides the boycott. It's their grocery prices, it's their store signs, etc.
I'll tell you this - I never had a problem with Target's prices, and I LOVED that their style was different than Walmart. I loved shopping at Target precisely because they are different than Walmart - turning themselves into Walmart is not going to work because then there is no reason to shop there instead of Walmart.
This is what I have been worried about with making bathrooms all inclusive. I don't really care if a transgender woman uses the same bathroom as me, but by saying anyone can use any bathroom, actual-identifies as a man- men can come in, which I am not comfortable with. Most men are not perverts and are not a risk or threat, but the ones who are will definitely take advantage of being allowed into the women's area.
I agree that an "anyone can use whichever one they want" policy was a bad idea. The problem is how do you word the policy (or the law) so that true transgenders can use the one that they need to use but creeps that are creeping are still legally barred?
So, Target holiday sales were even lower than expected. Even without yet reporting 4th quarter earnings, the stock has tumbled to below $64. And they STILL don't want to admit the boycott could be having an effect on traffic in the stores. They are blaming it on everything else - including their own website sales (people may still order online that won't go into the stores).
Here's a clue, Target. Christmas shopping is mostly done by families with children - those same families that you told their opinion and concerns regarding safety didn't matter.
Furthermore, as much as I miss shopping at Target, I'm out of the habit, as are many others. We've just gotten used to shopping elsewhere.
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LawyerLady
I can explain it to you, but I can't understand it for you.
I called Kohls going by the wayside 2 years ago. Yeah tell me with a smile that I save $200 today. Umm no, I paid what the low quality merchandise is worth.
I have a friend who actually manages a Target in NH, will have to ask him about business. NH retail tends to be stronger since we have no sales tax.
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Sometimes you're the windshield, and sometimes you're the bug.
If they had just kept their mouth shut, installed single stall bathrooms, and let the cards fall accordingly, they could have saved themselves from all this.
If they had just kept their mouth shut, installed single stall bathrooms, and let the cards fall accordingly, they could have saved themselves from all this.
Ain't it the truth! I haven't stepped foot in Target for quite some time. Getting away from focusing on being an excellent retailer and getting involved in social statement didn't ultimately go well for them...
Eh, there is one right near my office. I HAD to go there the other day due to an "accident" I had commuting in the morning, nothing to do with my car...
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Sometimes you're the windshield, and sometimes you're the bug.