Costco receives $184M in tariff refunds, says most will go toward lower prices

Costco on Thursday said it received $184 million in tariff refunds in the company’s fourth quarter, the majority of which was reinvested into lower pricing for members shopping at the retail giant’s warehouses.

The big box retailer said the lower pricing from tariff refunds was applied to a range of everyday items, including food and beverages, as well as other product categories.

Costco CEO Ron Vachris said on the company’s earnings call that the company “received some initial tariff refunds in the fourth quarter, and we reinvested some of these dollars to give value back to our members.

“This was predominantly through price reductions on a number of items in the second half of the quarter, including everyday items in produce, meat and beverages and some nonfood items such as home furnishings and hardware.”

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Costco CFO Gary Millerchip added that the company views the pricing reinvestments as “very much a giving value back to our members for the tariff refunds that we received.

“Our goal was to make sure that we spread those as we could to items that would have the most impact for members. … Quite a few everyday items were impacted.

“We did also invest some dollars into a number of nonfood areas where tariffs would have had an impact on those items, in particular, when the IEEPA tariffs were originally introduced,” he added.

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Millerchip said Costco received $184 million in tariff refunds in the company’s fourth quarter, which consisted of $174 million in refunds and $10 million in interest.

He added that amount represents a little over one-third of the total tariff refunds that Costco expects to receive, adding the company had already received a similar amount of refunds in the first quarter.

“We intend to continue reinvesting the majority of the dollars we receive in increased member values. As tariff refunds and tariff refund reinvestments are nonrecurring items that will continue to impact our financial results in fiscal year 2027, we plan to provide a similar level of information about the net impact on future quarterly earnings calls,” Millerchip said.

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Vachris was asked about the impact of tariffs on Costco’s offerings last year since the company had to remove a number of items from stores and replace them with other SKUs.

He said it “really was most impactful in the first, second quarter, died off a little bit in the third quarter that we got back to a little bit more normalcy.”