Costco uses $184 million tariff refunds to lower prices

  • Costco reinvested much of its tariff refunds in lower prices for members.
  • Costco received $184 million, including $174 million in tariffs and $10 million in interest.
  • Costco reported $93.9 billion in fourth-quarter net sales, up 11.2% year over year.

Costco received $184 million in tariff refunds during its fiscal fourth quarter, comprising about $174 million in refunded tariffs and $10 million in interest. Rather than retain most of the money as profit, the warehouse retailer said it reinvested much of it in lower prices across produce, meat, beverages, home furnishings and hardware. The refunds added $0.15 per diluted share to earnings on a non-recurring basis after some funds had already been directed toward member value. CFO Gary Millerchip said the payment represented slightly more than one-third of Costco's expected tariff refunds, and the company plans to put most future refunds into pricing. Costco reported fourth-quarter net sales of $93.9 billion, up 11.2% from a year earlier, while net income rose to $3.0 billion from $2.61 billion. Comparable sales excluding gasoline and foreign-exchange effects increased 6.7%. Walmart has said it plans to use roughly $2.9 billion in tariff refunds to help reduce prices across thousands of products. The refunds stem from the Supreme Court's February decision invalidating broad tariffs imposed under the International Emergency Economic Powers Act. Costco's strategy supports its membership model, with a worldwide renewal rate of 89.8% and 84.1 million paid members in the latest quarter.

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