Target (TGT) May Be Feeling the Pinch from its Transgendered Policy

Target (NYSE: TGT) shares are under heavy pressure Wednesday (-7.8%) after posting a mixed first quarter, with EPS beating but revenues missing analysts expectations. However, it was the second quarter guidance that gave investors pause. The company said it sees second quarter EPS of $1.00 - $1.20, versus the consensus of $1.36.

The news of Target's struggles has some conservatives celebrating.

A little less than a month ago, The American Family Association (AFA) called for a boycott of Target given its policy of transgender bathroom usage. At that time, Target took a public stand on the hotly-debated issue, saying, "we welcome transgender team members and guests to use the restroom or fitting room facility that corresponds with their gender identity." The AFA petition has 1.25 million signers to date and has been shared some 360,000 times on Facebook. This is not to count the potentially millions of other conservatives that have taken up the cause. Meanwhile, the estimated number identifying as transgendered in the U.S. is about 700,000 people.

Today's guidance from Target suggests the boycott may actually be having a financial impact. Target even admitted as much, but only to a small extent. According to a company spokesperson, the boycott may be impacting sales at a small number of locations in certain geographies.

"We have reviewed the data extensively and determined there was a very minor impact to traffic and sales in a very small number of Target stores," Target said in a statement to StreetInsider.com on the transgendered matter. "The exact impact on traffic and sales is immeasurable given all of the broader factors that are at play. "

The company didn't address the controversy on its conference call. The company is also sticking by its policy on the transgendered matter despite the potential impact on results.

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