The retail sector just ran a natural experiment in corporate political risk, and the results are in. In the months following pressure from the Trump administration to roll back diversity, equity, and inclusion programs, two of the largest U.S. retailers — Target and Walmart — capitulated. A third, Costco, held the line. Fortune has tracked the divergence in outcomes, and the numbers tell a story that corporate boards navigating this pressure will be studying closely.
The financial scoreboard
Costco reported revenue of $65.98 billion, representing 8.2% growth year-over-year. Member loyalty remains extraordinarily high, traffic is robust, and the company's combination of high employee wages and low executive-to-worker pay ratios continues to drive the operational culture that produces those numbers. Costco does not win on DEI grounds alone — it wins because its operational model is built differently than most retailers — but the DEI stance is part of the same cultural architecture that produces the business results.
By contrast, Target announced a rollback of its Racial Equity Action and Change program (REACH) within days of President Trump's executive orders on DEI, and allowed its three-year diversity goals to expire. Walmart moved even earlier, beginning to shift language and reduce visibility of internal equity efforts months before the executive orders were issued. Both companies made the calculation that capitulation would reduce political and regulatory risk. What they may not have fully modeled was the consumer response.
Costco's shareholder revolt that wasn't
The most revealing data point in this story is not a revenue figure. It is a vote. In late 2024 and early 2025, conservative activists mounted an anti-DEI shareholder resolution campaign targeting Costco. The result: over 98% of shareholders voted against the proposal. In a business context, a 98% shareholder vote is not a narrow win — it is an institutional consensus. Costco's investors, who are not a charitable organization, looked at the DEI programs and made a judgment that they were value-accretive, not a liability.
CEO Ron Vachris has been direct about the company's position. He has stated publicly that he does not want to be "surrounded by a bunch of people like me" — plain language from a CEO that signals genuine commitment rather than corporate-speak. The board has framed diverse employees and suppliers as drivers of "creativity and innovation" that improve member satisfaction. That framing puts DEI in the language of business outcomes, not social obligation.
The consumer behavior angle
The analyst community has pointed to several interconnected factors that contribute to Costco's resilience: strong customer loyalty, high wages that reduce turnover and improve service quality, and a membership model that creates switching costs. These factors would drive outperformance regardless of the DEI environment. But the DEI stance is not separable from the culture that produces those factors — it is part of the same management philosophy.
For Target and Walmart, the rollback mathematics were presumably driven by a different calculus: the political cost of maintaining DEI programs in the current environment exceeded the consumer cost of retreating from them. That may prove correct over a longer time horizon. Consumer behavior is notoriously difficult to tie to single corporate decisions, and the competitive dynamics of discount retail are complex.
What this means for the next wave of corporate decisions
Corporate America is watching this experiment. Every board room that is weighing a DEI rollback decision now has a data point to consider: Costco held its position, its shareholders backed it by a 98-to-2 margin, and its revenue grew 8.2%. That is not a guarantee that every company maintaining DEI programs will outperform. But it is evidence that the simple argument — that DEI programs create political risk that destroys shareholder value — has at least one prominent counterexample generating hard numbers that say otherwise.
The numbers don't lie. Costco kept its programs. Its business is booming. The A/B test is running, and one side of the ledger is currently ahead.
