Retail giant Target (TGT) wants to sell more clothes. The “weirdly hot” Santa Claus it rolled out a couple months ago did not exactly stuff stockings in the way it had hoped, so now it has high hopes for a new brand partnership. Target got together with Champion to put some new life in apparel sales, but investors do not hold out much hope. Shares are down over 2% in Wednesday afternoon’s trading.
The new deal is set to run several years, reports note, and will bring over 500 different items to Target stores produced by Champion. The Target website will also benefit from a huge new influx of Champion gear, and will range from the expected shirts and sweatpants, but also things like bags, accessories, and even outright sporting goods. With spring starting to make its presence known in North America, it should be a good time to be in sporting goods and apparel.
With holiday quarter sales only expected to gain about 1.5%, it is clear Target needs something to fire up its sales. But with economic uncertainty stalking the land right now, the idea of big new sales from sports wear seems like a bit of a long shot.
Protesting the DEI Loss
Meanwhile, Target’s move to cut its diversity, equity and inclusion (DEI) initiatives turned out to have a bit of a double-edged sword quality to it. While certainly, some welcomed the absence of woke, others did not. And those who did not made their feelings known by staying away in droves.
A week after Target announced it was paring back its DEI operations, a major point emerged: foot traffic at Target locations went into free-fall. The week of January 27 saw foot traffic drop 4%, while February 3 saw traffic drop a further 8.6%. That was followed by another 4% drop the week of February 10. There are several potential explanations—the week of January 21 was the week it snowed in New Orleans, after all—ranging from weather to economics. But the idea that DEI gets shut down followed by a huge gap in foot traffic may make some sit up and take notice.
Is Target Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TGT stock based on 12 Buys and 15 Holds assigned in the past three months, as indicated by the graphic below. After a 15.41% loss in its share price over the past year, the average TGT price target of $150.06 per share implies 20.48% upside potential.
