Costco received $184 million in tariff refunds in the fourth quarter, most of which were used to reduce prices to reward members

American-style store Costco received a tariff refund of US$184 million (approximately NT$5.86 billion) in the fourth quarter. (AP)

[Financial Channel/Comprehensive Report] American-style store Costco said that the company received US$184 million (approximately NT$5.86 billion) in tariff refunds in the fourth quarter, most of which was reinvested in lowering product prices so that members who shop at Costco can enjoy more cost-effective discounts. Costco said the price reductions brought about by tariff refunds have been 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 preliminary tariff refunds in the fourth quarter, and we reinvested some of those funds to return value to members.

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"This is mainly through price reductions on a number of commodities in the second half of the season, including daily commodities such as fresh produce, meat and beverages, as well as some non-food commodities such as household items and hardware," Vaklis said.

Costco Chief Financial Officer Gary Millerchip added that the company views these price reinvestments as a very direct return to members of the tariff refunds it receives.

"Our goal is to make sure that we spread those funds as much as possible across the items that will have the greatest impact on our members, and quite a few everyday items are affected," Millchip said. "We're also putting some of the money into some non-food items that will be affected by tariffs, especially when the IEEPA tariffs were initially rolled out."

Millchip said Costco received $184 million in tariff refunds in the fourth quarter, including $174 million in refunds and $10 million in interest. He added that the amount was slightly more than one-third of the total tariff refunds Costco expected to receive, saying the company had already received refunds of a similar amount in the first quarter.

"We intend to continue to reinvest the majority of the funds we receive to increase membership value. Because duty refunds and duty refund reinvestments are non-recurring items that will continue to impact our financial results in fiscal 2027, we plan to provide a similar level of information on the net impact in future quarterly earnings calls," Millachip said.

Vaklis was asked about the impact of tariffs on Costco's product supply last year, and revealed that the company had to withdraw many products from its stores and replace them with other items. He said that this did have the greatest impact in seasons 1 and 2, and then weakened slightly in season 3.

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