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Topline Target stock fell on Tuesday after the company issued an apology for selling a Halloween costume it admitted was “offensive” and “hurtful for our Black guests,” which prompted criticism from shoppers who alleged the costume evoked imagery of blackface.
Target stock is down nearly 4% as of shortly before 2 p.m. EDT, though it was down more than 5% at its lowest point Tuesday morning.
The stock dip follows the company issuing an apology late Monday, in which the retailer said it had stopped selling a Halloween costume for children that critics alleged evoked racist stereotypes.
“We removed an offensive Halloween costume that never should have been part of our assortment,” Target’s apology says, acknowledging the costume was “especially hurtful for our Black guests, team members and partners.”
The controversy has angered some shareholders, including Tejal Patel, executive director of Target shareholder SOC Investment Group, who told Reuters the incident is “another example in a chain of events where Target has lost trust with its consumer base.”
Morningstar analyst Brett Husslein said the retailer’s stock price dip “reflects the market’s view on the fragility of their competitive positioning when merchandising missteps or brand controversy occurs.”
Major stock market indexes are up Tuesday, with Target’s drop placing it among the day’s top three losers on the S&P 500 as of shortly before 2 p.m. EDT.
Target had sold a costume designed for children, titled “Kids' Glows Under Blacklight Circus Clown Halloween Costume,” which featured a Black child modeling the costume in a promotional image on the retailer’s website. But the costume garnered backlash from critics who said it evoked racist stereotypes of Black people, particularly mirroring Jim Crow-era minstrel caricatures and blackface. The costume’s listing on Target’s website appears to no longer be active. In its apology, Target said pulling the costume from shelves “is an important first step, and we are looking closely at how this happened and what needs to change to ensure this won’t happen again.”
Target’s stock had been on a major upswing so far this year, rising nearly 70% year-to-date. The company introduced a new chief executive, Michael Fiddelke, earlier this year, and it appears to have turned the corner on a sales slump, saying last week it expects net sales to increase 5% for this fiscal year.
Target has faced high-profile controversies in recent years that have angered some customers and placed the retailer in the center of culture war debates. Last year, Target was one of several corporations to scale back diversity, equity and inclusion initiatives as President Donald Trump retook office. In a January 2025 statement , Target said it would phase out “three-year diversity, equity and inclusion goals,” including rolling back its Racial Equity Action and Change initiatives and ceasing participation in external diversity surveys. The company faced backlash from customers, and in a May 2025 earnings call, then-CEO Brian Cornell said customer boycotts over the DEI retreat was partially to blame for a first-quarter sales decline. Target, which had long positioned itself as an LGBTQ ally, also sparked backlash among its customer base when it scaled back its Pride Month merchandise line in 2023. In May 2023, the company said it would remove certain items from its Pride collection because viral backlash, led by conservative customers, was “impacting our team members’ sense of safety and well-being while at work.” The conservative backlash was partly boosted by viral misinformation, as some critics had accused Target of selling a “tuck-friendly” swimsuit for children, though the product, designed for transgender women, was sold in adult sizes only. The state of Florida later sued Target in 2025, alleging the company defrauded investors by failing to disclose the financial risks of its Pride merchandise line. The lawsuit blamed the Pride controversy for the retailer’s falling sales at the time.
Target Apologizes and Drops Halloween Costume Criticized as Racist (New York Times)
Target Drops Diversity Initiatives—After It Previously Caved To Pressure From Pride Month Collection (Forbes)
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