Costco CFO says $184M tariff refunds fund price cuts and churro return
Costco CFO Gary Millerchip said the retailer received $184 million in tariff refunds, including $10 million in interest, for the quarter ended Aug. 30. He added that the company is mainly using those refunds to lower prices on produce, meat, beverages, and select home‑furnishing and hardware items, while confirming a limited‑time return of the food‑court churro to all U.S. locations.
Costco reported Q4 net income of $2.99 billion, up from $2.6 billion a year earlier, and net sales rose 11.2% to $93.9 billion year‑over‑year. Millerchip noted the $184 million refund represents a little more than a third of the total tariff refunds the company expects to receive. The retailer said it will continue to disclose similar tariff‑refund details on future earnings calls because the refunds and related reinvestments will affect results through fiscal 2027. Executives also said inflation remains low‑single‑digit and relatively stable, with deflation seen in eggs, dairy and butter but price pressure in gas, motor oil and resins.
“I do want to address the speculation that’s been blowing up our social media feed and confirm that the rumors are true, for a limited time the food court churro will be returning to all our U.S. locations,” Gary Millerchip, CFO said.
“On the pricing investments, we view that as very much a giving value back to our members for the tariff refunds that we received,” Gary Millerchip, CFO said.
The refunds stem from a Supreme Court decision that struck down tariffs imposed under the International Emergency Economic Powers Act, with U.S. Customs returning the money. In March an Illinois customer sued Costco, alleging unfair and deceptive trade practices for using the refunds to cut prices instead of reimbursing shoppers who paid the tariffs.
What we know
The warehouse club retailer received $184 million in tariff refunds, including $10 million in interest, in the quarter ended Aug. 30, or a little more than a third of the total refunds it expects, CFO Gary Millerchip said.
The Issaquah, Washington-based company reported Q4 net income of $2.99 billion, compared to $2.6 billion in the year-earlier period.
Net sales, meanwhile, rose 11.2% to $93.9 billion year-over-year.
“I do want to address the speculation that’s been blowing up our social media feed and confirm that the rumors are true, for a limited time the food court churro will be returning to all our U.S. locations,” Millerchip said.
Costco Wholesale CEO Ron Vachris said that the company "predominantly" used initial tariff refunds it got in its fiscal fourth quarter to lower prices on produce, meat and beverages, as well as some home furnishing and hardware items, according to a Sept. 24 earnings call.