Costco Can 'Weather' Tariffs Better Than Others, CFO Says
Costco sees “many moving parts” in an “extremely fluid” environment now that Section 301 tariffs are in effect on $250 billion worth of Chinese imports, Chief Financial Officer Richard Galanti said on an Oct. 4 earnings call. Working with suppliers…
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“to see what can be done to reduce and/or absorb some of the costs” is one of the strategies Costco is “exploring,” Galanti said. “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,” Galanti said. That Costco owns 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 Association representing big-box retailers, lobbied unsuccessfully against the three rounds of tariffs.