Costco Can 'Weather' Tariffs 'Better Than Others,' Whatever Their 'Negative,' Says CFO

Costco sees “many moving parts” in an “extremely fluid” environment now that Trade Act Section 301 tariffs are in effect on $250 billion worth of Chinese imports, said Chief Financial Officer Richard Galanti on an earnings call Thursday. Working with suppliers “to see what can be done to reduce and/or absorb some of the costs” is one of the strategies Costco is “exploring,” said Galanti. “Reducing our commitments on certain impacted items” is another possible remedy, he said. There’s “limited ability” to find “alternative country sourcing,” even where that’s “possible and feasible,” and that “takes time,” he said. “We’ll have to see how customers and competitors react to tariffs, and what impacts it will have.” It’s in Costco’s “DNA” to be the last to raise prices on consumers, and “we want to work with any supplier to figure out how to not do that,” said Galanti. That Costco has more than $138 billion of purchasing power “affords us, I think, some opportunities that perhaps make it a little easier for us,” he said. People “smarter than me” don’t like tariffs, he said. “Whatever negative” they bring, “we can weather it better than others,” he said. Costco, through membership in the Retail Industry Leaders Coalition representing big-box retailers, lobbied unsuccessfully against the three rounds of tariffs.