Costco Uses US$184 Million in Tariff Refunds to Lower Prices
Costco Wholesale Corp. is applying US$184 million in tariff refunds received during its fourth quarter to reduce prices on produce, meat, beverages, and non-food items. The company reported an 11% revenue increase to US$95.7 billion, exceeding expectations.
Costco Wholesale Corp. has announced that it will use US$184 million in tariff refunds received during its fourth quarter to lower prices for members. The reductions will apply to specific categories, including produce, meat, beverages, and non-food items.
These refunds were issued after the U.S. Supreme Court struck down tariffs under the International Emergency Economic Powers Act in February. Costco CFO Gary Millerchip stated that this US$184 million amount represents about one-third of the total refunds the company expects to receive. He also noted that a similar amount, approximately US$184 million, was already received during the current quarter.
In addition to the price adjustments, Costco reported strong financial performance. Total revenue rose 11 per cent to US$95.7 billion, beating analyst expectations of US$94.86 billion.
The company also addressed changes in its product lineup from the previous holiday season. During that period, tariffs forced Costco to reduce its non-food product line and Christmas goods due to selective customer spending. However, CEO Gary Vachris said these tariff-induced product changes died off by the third quarter. Consequently, normal buying lineups are expected for the upcoming holidays.