(Bloomberg) — Target Corp. shares fell on Tuesday following a surge of criticism over a Halloween costume that sparked an apology from the big-box retailer.
The company announced Monday it had removed the costume, which critics said evoked blackface imagery. “The costume is offensive and should never have been part of our assortment,” Target said. The retailer is investigating how the product made it into its inventory.
Target shares dropped 3.7% at 1:18 p.m. in New York, making the stock one of the biggest decliners in the S&P Retail Select Industry Index. US consumer confidence, which fell in August to the lowest level since the start of the year, also weighed on retail stocks on Tuesday.
Chief Merchandising Officer Cara Sylvester apologized to employees on Tuesday and vowed that the company will learn from the mistake and do better.
“I wanted you to hear from me that we take this very seriously,” Sylvester wrote in the memo, which was viewed by Bloomberg News. “We have taken a number of steps to acknowledge and address the impact both internally and externally, and are actively working to understand how this happened and what needs to change moving forward.”
Target’s stock had advanced 74% so far this year through Monday’s close as the company has improved results and reestablished sales growth under new Chief Executive Officer Michael Fiddelke.
“They have a few steps forward. It’s a step back,” said Joe Feldman, an analyst at Telsey Advisory Group. It’s a “self-inflicted problem,” he said, adding that while all retailers have merchandising issues from time to time, Target appears to have them more often than others.
Target angered some shoppers in early 2025 after it pulled back from its diversity initiatives as Donald Trump returned to the White House. Shortly after taking over as CEO earlier this year, Fiddelke told staff that the company’s standing had been damaged, especially among Black shoppers, and that work was underway to reconnect with them, Bloomberg News previously reported.
Past controversies with Target products include a Black History Month book that was pulled in 2024 after it misidentified civil rights icons. In 2023, the company’s assortment of products tied to LGBTQ Pride month spurred protests and aggressive behavior toward employees.
(Updates with share move and comment from company’s chief merchandising officer from the second paragraph.)
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