Target's Store Traffic Is Falling — Should Investors Be Concerned?
Target (TGT) has seen its foot traffic and stock price fall this year due to a variety of factors.
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Do these drops spell bad news for the company and its stock? Given the falling foot traffic, some investors may be wondering whether they should be concerned about the stock.
On Jan. 24, 2025, Target released a fact sheet detailing its Belonging at the Bullseye Strategy. In it, the company announced it'd be concluding its three-year diversity, equity and inclusion goals as well as its Racial Equity Action and Change (REACH) initiatives.
It said it'd also continue to provide employee resource groups that are open to everyone, evaluate corporate partnerships, stop external diversity-focused surveys and turn its 'Supplier Diversity' team to 'Supplier Engagement' as a way to reflect its inclusive global procurement process.
The week following this announcement, Target saw its foot traffic drop 4% year over year, Retail Brew reported. The following weeks also saw decreases in foot traffic from the previous year. This was in contrast to the numbers preceding the announcement, in which foot traffic had been up 5% to 11.8% for the first four weeks of the year.
This decrease in foot traffic may leave some investors wondering whether they should be concerned about Target's performance and its stock.
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A zoomed out view of Target stock shows that it's down more than 33% for the year, as of April 17. And the stock has fallen significantly over the past year, down more than 44%. And that could be telling of more trouble for the brand.
'From an investor's point of view, it's not just the stock falling from $143 to around $90. It's the lawsuits, the bad press, the perception that the brand is either confused or reactive. That stuff adds up,' said David Kindness, CPA, a personal finance writer at Best Money.
The answer to whether or not investors should be concerned comes down to risk tolerance. At the moment, the stock market is down in general following President Donald Trump's tariff announcement.
Peter Tran, CPA, a tax and personal finance expert with A&C Accounting and Tax Services, said that as an accountant, he sees the numbers behind the stories. '[Its numbers are] telling me that Target's financials could be squeezed if this goes on too long. They've already reported a 3.1% loss for Q4, and the continued drop in foot traffic doesn't bode well for maintaining healthy revenue streams,' he said.
Because of these headwinds, investors should proceed with caution. 'Given all this, it makes sense for investors to watch closely, hoping for signs of a rebound but also staying realistic about the potential challenges in winning over a disappointed customer base,' Tran said.
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This article originally appeared on GOBankingRates.com: Target's Store Traffic Is Falling — Should Investors Be Concerned?
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