Shareholders have filed a lawsuit against Target alleging that the retail giant intentionally misled investors about the risks its diversity, equity and inclusion (DEI) policies posed to its stock prices.
In a class action lawsuit filed in Florida on Friday, the City of Riviera Beach Police Pension Fund claimed Target’s stock was “artificially inflated” because the retail chain failed to relay the scope of consumer backlash to its initiatives promoting diversity and LGBTQ pride.
In May 2023, Target launched a Pride Month campaign with various home goods and clothing items celebrating LGBTQ+ people. Following the spread of misinformation about the promotion by right-wing influencers, the company removed some of the items from its stores. The post-Pride boycott impacted Target’s stock prices immediately, and they continued to be shaky all through 2024.
Target’s stock performed poorly over the last year when compared to similar companies like Walmart. The plaintiffs say Target issued “false and misleading” statements about how its social initiatives would impact its stock prices. Shareholders claim in the suit that they paid inflated prices for Target stock, fueling the company’s “misuse of investor funds to serve political and social goals.” The lawsuit covers all shareholders who bought Target stock between August 26, 2022 and November 19, 2024.
Earlier this month, Target announced that it would be “concluding its three-year diversity, equity and inclusion goals.” The decision faced widespread backlash from progressives and was described as “cowardly” and “bowing to the Trump administration” by civil rights attorney Nekima Levy Armstrong.
Armstrong’s sentiment was echoed by many supporters, who urged potential Target customers to turn their patronage to companies that have expressed support for diversity and inclusion, such as Costco.
