Target shares fall 5% after Halloween costume controversy

Target Corp.'s shares declined roughly 5% in early trading on Tuesday after the retailer issued an apology and withdrew a Halloween costume that some observers said resembled blackface and minstrel imagery. The item, marketed as a "Kids' Glows Under Blacklight Circus Clown Halloween Costume," sparked backlash on social media for its perceived racist caricature.

The company said it was "deeply sorry" and that the costume "should never have been part of our assortment" and is no longer for sale. It added that the incident was especially hurtful for Black guests, team members and partners.

Critics said the apology did not satisfy them. Sheletta Brundidge, a Minneapolis entrepreneur who previously protested Target over DEI rollbacks, told Reuters the apology "truly did not" address her concerns. "Target keeps showing us who they are," she said.

SOC Investment Group, a Target shareholder that has been critical of the retailer's leadership, described the episode as another instance where Target has lost trust with its consumer base. Executive director Tejal Patel said the decision to pull the product could affect sales over the long term.

The controversy adds pressure to Target, which is navigating a challenging consumer environment while new CEO Michael Fiddelke pursues a turnaround strategy. Shares have risen about 70% this year after investors welcomed early gains from price cuts and refreshed merchandise, but a Morningstar analyst said the 5% drop reflects market concerns about the company's competitive positioning when merchandising missteps or brand controversies occur.