A Florida federal judge ruled Wednesday that Target Corp. must face claims from investors alleging that backlash against its 2023 LGBTQ-focused marketing campaign caused a sharp decline in sales and stock value. The decision came as U.S. District Judge John L. Badalamenti denied Target’s motion to dismiss the suit, stating that the investors have plausibly argued that the company issued misleading risk disclosures.
The case, brought by investors Brian Craig, Laura Thompson, Steven Cook, Carol Bowe, and Inspire Advisors LLC, centers on Target’s failure to specifically warn of potential boycotts tied to its 2023 Pride Month campaign. While Target’s SEC filings contained general warnings about risks from its environmental, social, governance (ESG) and diversity, equity, and inclusion (DEI) initiatives, Judge Badalamenti said the disclosures were too vague to address the specific risks associated with the campaign.
Alleged Failures in Risk Warnings
Judge Badalamenti found that Target’s filings omitted key details about the 2023 Pride Month campaign, which focused on children and families and included prominently displayed merchandise. The complaint claims that this initiative triggered customer boycotts, resulting in a $10 billion loss in market valuation between May 18 and 28, 2023, marking the most significant stock drop in the retailer’s history.
