NEW YORK (AP) — Sales at Target fell more than expected in the first quarter, and the retailer warned they will slip for all of 2025 year as its customers, worried over the impact of tariffs and the economy, pull back on spending.

Target also said that customer boycotts have also done some damage during the latest quarter. The company scaled back many diversity, equity and inclusion initiatives in January after they came under attack by conservative activists and the White House. Target's retreat created another backlash, with more customers angered by the retailer's reduction of LGBTQ+-themed merchandise for Pride Month in June of 2023.

Shares fell 3% before the opening bell Wednesday.

Sales fell 2.8% to $23.85 billion in the quarter, and that was short of the $24.23 billion Wall Street expected, according to FactSet. Sales are also down from the $24.53 billion the company reported during the same period last year.

Target cut its annual sales projections Wednesday. The company now expects a low-single digit decline for 2025 after projecting a 1% increase for sales in March.

It also forecast annual per-share earnings of $7 to $9, excluding gains from legal settlements this year.

For the year, analysts expect earnings per share of $8.34 on sales of $106.7 billion.

Comparable store sales, those from established stores and online channels, fell 3.8%. That includes a 5.7% drop in store sales and a 4.7% increase in online sales. That reverses a comparable store sales increase of 1.5% in the previous quarter.

The number of transactions across online and physical stores fell 2.4%, and the average ticket dropped 1.4%. Target said Tuesday that it couldn’t reliably estimate the individual impact of each of the factors that were hurting its business.

Target is setting up a new office to be led by Chief Operating Officer Michael Fiddelke would focus on making faster decisions to help accelerate sales growth. Current Chief Strategy and Growth Officer Christina Hennington will move into a strategic adviser role.

Target is also intensifying efforts to entice customers who are nervous about the economy and inflation. The retailer says it is offering 10,000 new items starting at $1 — with the majority under $20.

“I want to be clear,” Target CEO Brian Cornell told reporters on a call Tuesday. “We’re not satisfied with these results, so we’re moving with urgency to navigate through this period of volatility ... We’ve got to drive traffic back into our stores or visits to our site.”

Out of 35 merchandise categories including discretionary and essentials that the company tracks, it’s gaining or maintaining market share in only 15, the company said. The company cited that there were some market share gains in women’s swimwear, infant and toddler clothing, and active wear.