Boycotts hit stocks hard. Here’s what might be next for Bud, Target and others caught in the anti-Pride backlash


Pride Month merchandise is displayed at a Target store on May 31, 2023 in San Francisco, California. 

Justin Sullivan | Getty Images

Even before Pride month was underway, it seems as if it was open season on companies celebrating the LGBTQ community.

One by one, companies have come under an expanding attack. Anheuser-Busch, Target, Kohl’s and VF Corp.’s North Face brand have all felt the vitriol of this latest push from the right. And the list keeps growing. These companies have been branded as “woke capitalists” — and worse — as critics urged boycotts of these companies’ products. Bud Light came into the crosshairs after it struck a partnership with trans influencer Dylan Mulvaney, while North Face received backlash for an ad featuring drag queen Pattie Gonia. Target and Kohl’s have been criticized for Pride-themed clothing.

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While it’s too early to say how successful these efforts will be in lowering sales at the companies recently drawn into this attack, damage has been done to the stocks already. And some on Wall Street expect that to continue with analysts recently downgrading Target’s and Anheuser-Bush’s ratings, citing in part the ongoing controversy.

“The main reason boycotts generally are effective is because they threaten the reputation of the company by putting the company in a negative media spotlight, and companies don’t want to have negative attention of any kind drawn to them,” said Brayden King, a professor of management and organizations, who has studied how boycotts impact company stock prices, in an interview.

King’s research focused on 133 separate boycotts launched between 1990 and 2005, in a study that was published in 2011. About a quarter of the 177 companies targeted by these actions offered a concession to protestors.

“They often concede to boycotter’s demands, not because they feel that there’s sales pressure on them, but rather because they don’t want to continue to be a target of negative media attention,” he said.

King’s research found that the stock of a company will fall about 1% each day of national print media coverage. But once the issue falls out of the daily news cycle, the stock generally recovers.

Why Bud Light is an outlier

King sees Anheuser-Busch’s situation as an outlier because the controversy has harmed its sales. The company has been under fire for more than two months. Over that time, its stock is down more than 18%.

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Anheuser-Busch InBev shares hit a 52-week high of $67.09 on March 31.

“With 7 weeks of data, the consumer backlash at Bud Light seems quite durable,” said Cowen analyst Vivien Azer, in a research note Friday. “This is not a surprise to us, given how violent the responses were to Bud Light on social media. Indeed, in each of the last five weeks, we have seen Miller Lite and Coors Light gain over 200 bps of market share from Bud Light (where market share fell 390 bps most recently).”

Cowen’s consumer research suggests Molson Coors will be able to maintain the market share it’s gaining.

“Relative to Miller Lite and Coors Light, the Bud Light brand seems to skew to white consumers, men, younger consumers and lower-income consumers. The income bias toward Bud Light, we believe, is a key factor in driving the durable market share gains to TAP,” Azer explained.

Molson Coors shares are up 24% over the past two months, as analysts have spotlighted the market share gains it’s making.

Bud Light has tried to win back customers with a $15 off rebate program on Budweiser, Bud Light, Bud Select and Bud Select 55. While shoppers will need to put out money for the purchases on the front end, once the rebate is processed, the product is essentially free, according to Azer.

Will this be enough to soothe angry consumers? She’s unconvinced.

“Recall there were consumers that were happy to destroy beer they had already purchased,” she said.

Budweiser beer in the brewery section at a Walmart Supercenter on March 02, 2023 in Austin, Texas. 

Brandon Bell | Getty Images

There are several factors contributing to the impact the Bud Light boycott is having on sales that are specific to the beer category, according to King. He said, the first is that a bar, restaurant or music venue could remove the product, which takes the decision away from consumer. Then, there is the social nature of drinking.

“When you’re purchasing something in private, there’s nobody looking over your shoulder to hold you accountable,” King said. However, beer may be purchased to drink with friends so there could be more social pressure, he said.

Companies on edge

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Target’s stock hit a 52-week low on Thursday.

Target’s stock has fallen about 10% since news broke on May 24. But shares were already trending lower after the retailer’s earnings report showed weakness in parts of its business.

Meanwhile, both VF Corp. and Kohl’s shares seemed to be bouncing back on Friday. After recovering some lost ground, the North Face parent is down about 9% since it launched its “Summer of Pride” ad on May 23. Kohl’s shares rose nearly 12% on Friday, recouping nearly all of the ground it lost. But the stock sank as low as $17.89 on Thursday, its lowest level since May 22, 2020.

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VF Corp. shares traded as low as $16.77 on Thursday.

Target’s stock sank to a 52-week low of $126.75 on Thursday, following a downgrade by JPMorgan to neutral. While analyst Christopher Horvers cited a weakening consumer as the primary reason that he expects tougher times ahead for the discount retailer, the recent controversies were mentioned as a factor in the decision. Horvers slashed his price target to $144 from $182.

Meanwhile, Wells Fargo analyst Edward Kelly said the recent pullback in the stock’s price might have been seen as a buying opportunity prior to this issue.

“The current stock price could have been a good entry point, but it’s hard to step in front of the current uncertainty,” Kelly wrote in a research note Thursday.

Kelly said that he has seen “early evidence of some near-term financial impact.” Among the factors he cited was Placer.ai data that showed foot traffic at Target stores was soft in the week ended May 28.

“Traffic has been a key bright spot for TGT as it struggled with margin issues, and a slowdown would be negative. It remains to be seen how long any impact would last,” Kelly said.

Issues give brands ‘powerful gravitational pull’

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Kohl’s shares on Thursday hit a low of $17.89, the stock’s lowest level since May 22, 2020, when it traded as low as $17.19.

“So a bit of … why it is so attractive to align with purpose and these sorts of issues is that … it gives you an opportunity to link more deeply with consumers,” Reed said. Even though it can go awry, the upside can be powerful because the connection “has powerful gravitational pull,” he said.

In fact, those strong relationships are usually why boycotts fail to hurt a company’s sales longer term, according to King. He said research has shown that for every consumer that stops buying a product another shopper will begin a “buycott” by purchasing items to show their support for the opposite side of the issue.

Still, with threats coming from both sides of the issue, and stocks suffering sharp selloffs, companies may proceed a bit more cautiously.

“They may internally continue to embrace those values as important to their culture and identity, but externally they may be more risk adverse in terms of how they communicate those values,” King said.

—CNBC’s Christopher Hayes contributed to this report.



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