Costco books $184 million in tariff refunds and says most will go to lower prices

Costco confirmed it received $184 million in tariff refunds, with more on the way, according to its latest earnings call¹. The company said most of the money will go toward lower prices².

Reported earnings came in at $6.75 per share, including a 15-cent nonrecurring benefit related to the refunds, and total revenues rose 11.1% year over year³. Gross margin contracted 11 basis points year over year to 11%, a figure the company attributes partly to gasoline⁴. RBC said Costco’s fundamentals remain stable after the fiscal fourth quarter⁸.

Accounts of the profit line do not agree. Quartz reported that fourth-quarter net income rose 15% to $3 billion, boosted by $184 million in refunds collected under the IEEPA tariff authority⁵. A report on the earnings call said net income jumped 12.3% to $2.61 billion, with analysts pressing management on membership growth deceleration, the return on tariff reinvestment and the grocery inflation trajectory⁶. Both accounts credit the same refund.

Why it matters to investors

The refund is a reversal of a cost, not a trading gain, and the company has flagged it as such. Costco said tariff refunds and refund reinvestments are nonrecurring items that will continue to affect its financial results in fiscal year 2027², and its finance chief repeated that the refunds and reinvestments will keep moving the reported numbers into fiscal 2027⁷.

That creates two distinct signals inside one print. The first is the underlying trading performance, with revenue growth of 11.1%³ and a gross margin of 11%⁴. The second is a policy-driven, non-operating item that lands in the same quarter and that management says will recur in the next fiscal year^2,7.

The decision to put most of the money into prices rather than margin² is the part with read-across for consumer inflation, because it routes a government repayment back to shoppers rather than to earnings.

What to watch

The first item is the size of the further refunds Costco says are still coming¹, and how much of that is reinvested in prices rather than retained². The second is the membership growth deceleration that analysts raised on the call⁶, since fee income is the part of the model that does not depend on tariff policy.

The third is how the company reconciles the profit figures now in circulation^5,6, and whether fiscal 2027 guidance separates operating results from the non-recurring customs items it has flagged⁷.