Target Q2 sales fall on muted spending, Pride month backlash, and it cuts profit outlook for 2023

abcnews.go.com:

Target reported its first quarterly sales drop in six years, dragged down by shoppers' inflation worries and a negative reaction by some customers, widely publicized on social media, to its Pride merchandise

NEW YORK — Target reported its first quarterly sales drop in six years, dragged down by shoppers' inflation worries and a negative reaction by some customers, widely publicized on social media, to its Pride merchandise.

The Minneapolis retailer expects high interest rates, which makes credit cards more expensive to use, and higher prices on food to continue to put a strain on customers and on Wednesday, the chain cut its profit outlook for the year. It also expects sales will decline for the remainder of the year. In lowering its forecast, Target also cited the end of the student loan moratorium, which had provided one-time college students a little more financial breathing room.

Profit for the fiscal second quarter came in above expectations, however, as Target brought inventories closer in line with cautionary spending on discretionary items by customers.

Shares rose nearly 4% in afternoon trading Wednesday despite trimming profit expectations for the year.

Target is among the first major U.S. retailers to report quarterly financial results and the impact of rising prices and elevated interest on its customers will get a lot of attention ahead of a raft of quarterly reports from companies like Walmart other retailers.

CEO Brian Cornell said higher high prices for food and household essentials are taking a bigger chunk out of the paychecks of customers, who have also pulled back on buying some goods in favor of travel or spending time out of the house in other ways.

“Guests are out at concerts,” Cornell told