Florida is pursuing legal action against Target over what it says were actions that misled investors by failing to adequately disclose financial risks linked to its diversity, equity, and inclusion (DEI) initiatives.
More and more companies are beginning to distance themselves from previous DEI policies. In January, Target said it was discontinuing one DEI program that aimed to better serve its Black employees, Black shoppers, and Black-owned businesses. The program had been put in place in the wake of the killing of George Floyd in 2020.
The state of Florida is arguing in a lawsuit that Target violated the Securities Exchange Act by failing to warn shareholders about the potential backlash from its former DEI and Pride Month initiatives.
In one example, Target was criticized for launching a series of LGBTQ clothes marketed toward children, including a “Pride Toddler Sleeveless Romper.” Gays Against Groomers shared a video and image of one of Target’s displays, urging followers to take their business elsewhere.
After recently announcing the DEI rollback, Target faced calls for boycotts from supporters of woke initiatives. Some activists and organizations, like Twin Cities Pride, started rejecting Target’s sponsorship out of protest.
Florida’s State Board of Administration filed the lawsuit alongside the conservative advocacy group America First Legal. The lawsuit accuses the retailer of directly harming shareholders by taking actions that resulted in a drop in sales.
In 2023, Target recorded a drop in sales for the first time in years. However, not all of the reduction was linked to their DEI initiatives. A portion of the loss resulted in the rise in retail theft that has plagued businesses nationwide, including Target.
Target’s share price has taken a severe hit in recent months. Over the past year, Target’s stock, which trades under the ticker TGT on the New York Stock Exchange, has fallen nearly 16%. At the same time, the S&P 500 is up almost 22%.
