Costco (COST): Weaponizing a $184M government refund [Q4 2026]

Costco is using windfall tariff refunds and zero-cost AI-driven traffic to fund price cuts and defend pricing authority as core comp growth normalizes to 6-7%.

• Revenue and EPS beat: Q4 FY2026 (16-week quarter) revenue rose over 11% YoY; EPS hit $6.75, up 15% YoY, yet stock closed slightly red after gapping up above $910.
• Tariff refund redeployed: A $184 million IEEPA tariff refund (~$0.15/share) was reinvested into price cuts on meat, hardware and produce rather than kept as margin, and management says Q1 FY2027 already brought a similar refund amount.

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