Target said reaction to the rollback of its diversity, equity and inclusion efforts was a headwind in the first quarter.

The discounter announced on Wednesday that sales fell more than expected in the first quarter, and the retailer warned they will slip for all of 2025 year as its customers, worried over the impact of tariffs and the economy, pull back on spending.

The retailer's CEO attributed the results to weakness in discretionary spending, declining consumer confidence, uncertainty over tariffs, and shopper backlash against the company’s decision to halt diversity initiatives.

The past few years of cost-of-living increases, which have forced many shoppers to focus on the basics, have shifted that narrative for Target.

Target's sales fell more than the Minneapolis-based retailer expected they would in the first quarter, and the company is warning they will slip for the rest of the year as shoppers limit spending.

The firm's analysts think highly of Target's long-term prospects, despite cutting their price target for the fifth time since last March.

MINNEAPOLIS — MINNEAPOLIS — Target Corp. (TGT) on Wednesday reported fiscal first-quarter earnings of $1.04 billion. The Minneapolis-based company said it had net income of $2.27 per share. Earnings, adjusted for non-recurring gains, were $1.30 per share.

Ticker: Target sales drop in 1st quarter and retailer warns they will slip for all of 2025; Canton company fined $11M

Retail giant Target is facing an increasingly complex array of challenges, from slumping sales and shifting consumer spending habits to ongoing supply chain complexities and the lingering fallout from past controversies.