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Nonrecurring tariff refunds reinvested to lower prices can boost member traffic and basket size in the near term, potentially improving comps. However, the impact on margins may be modest if refunds dilute pricing power; the long horizon through FY2027 adds uncertainty.
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Costco disclosed $184 million in tariff refunds in Q4, mostly reinvested to lower prices for members across numerous items. Management frames the refunds as value back to members, noting their nonrecurring nature and a plan to reinvest through FY2027. The move could bolster traffic and loyalty, but may compress near-term margins while shifting earnings impact over the multi-year horizon.
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