A container ship being loaded at the Port of Long Beach in October 2008, the kind of cargo on which the emergency tariffs were paid and are now being refunded · biofriendly, via Wikimedia Commons · CC BY 2.0

Study · REFUND · 2026-09-24 · 8 min read · Retail and trade policy · Stocks

Costco books a third of its tariff refund: 184 million dollars

What changed since 22 September: Costco's fourth quarter is the first result of the new fiscal year to carry the refund; ten releases from August and September put the money into earnings, prices, vendors' hands and, in one case, a sale of the claims themselves, in different shares; phase three of Customs' process opens on 6 October for the court's plaintiffs only.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

COSTdirect TGTdirect TJXdirect GAPdirect WSMdirect DLTRdirect Mdirect DKSdirect ASOdirect KSSdirect AZOdirect

What happened

Costco reported after the close on Thursday 24 September that net sales in its sixteen-week fourth quarter to 30 August were 93.9 billion dollars, up 11.2 percent, and net income 2.998 billion, or 6.75 dollars a share against 5.87 a year earlier; for the fiscal year, net sales were 297.2 billion, up 10.1 percent, and net income 9.226 billion, or 20.76 a share. The release carries one sentence on the tariffs: 'This year's fourth quarter was positively impacted by a non-recurring benefit of $0.15 per diluted share from IEEPA tariff refunds received in the quarter, less partial reinvestment of those refunds in increased member values.' Comparable sales rose 9.4 percent, or 6.7 percent without gasoline and currency; membership fees were 1.850 billion in the quarter; the company ended the year with 939 warehouses. ^[1]

On the call that followed, Yahoo Finance reported, the chief financial officer, Gary Millerchip, put the refunds received in the quarter at 184 million dollars, 174 million of refunds and 10 million of interest, and said the amount 'represented a little more than one-third of the total refunds the company expects to receive.' The chief executive, Ron Vachris, said the company had used some of the fourth-quarter refunds to reduce prices in the latter half of the period on produce, meat, beverages, home furnishings and hardware, among other categories, and management said it intends to reinvest the majority of future refunds in member value. ^[2]

This is the second chapter of a series that opened on 22 September, when the record was AutoZone's and MillerKnoll's releases of that morning and Customs' declaration to the Court of International Trade that, as of 11 September, it had accepted about 134.7 billion dollars of potential and certified refunds for processing and transmitted roughly 122 billion to the Treasury for disbursement. What has changed since is the arrival of the first result of the new fiscal year, Costco's, with a figure for what is still to come, and the desk's reading of ten releases from August and September for the dollar figures and the words that go with them. Customs has published no new count, and phase three of its process still opens on 6 October. ^{[16, 17, 3, 4]}

The record

A full-text search of EDGAR for 'IEEPA' with 'refund' in current reports filed between 15 August and 24 September returns 32 documents. The desk read ten of the releases behind them. Target recognized 994 million dollars of IEEPA tariff refunds received in its second quarter as a reduction of cost of sales, which it says contributed 752 million to net earnings and 1.65 dollars 'to both GAAP and Adjusted EPS', and it built about 90 basis points of the benefit into its full-year operating margin. TJX received 331 million and booked a net pretax benefit of 219 million after setting 112 million aside for incremental compensation, 14 cents a share. Gap recorded a 417 million adjustment to cost of goods sold, refunds of approximately 512 million less a 'commitment of appreciation' of about 95 million to certain vendors, of which 95 million had actually arrived by quarter end with the rest expected in the third quarter. ^{[5, 6, 7, 8]}

Williams-Sonoma recorded a 167.8 million dollar reduction of cost of goods sold and 6.3 million of interest, offset by a 47.5 million provision to reimburse vendors that had earlier given tariff concessions and a 10.0 million one-time employee recognition cost, and deferred 29.3 million against inventory for the next quarter; substantially all of its initial claim of 197.8 million had been collected by 2 August. Dollar Tree's 383 million, 369 million of it in cost of sales and 14 million as interest, was worth 1.31 dollars a share after 37 million of reinvestment expense, and its raised full-year outlook carries about 60 cents of it. Macy's has received all the 116 million it expected, 98 million in the quarter and 18 million after, and says about 20 million will flow to full-year earnings while the remaining 96 million is being invested in 2026. ^{[9, 10, 11]}

Dick's Sporting Goods received 59.0 million of refunds and 2.1 million of interest, excludes the 38.1 million attributable to the prior year from its non-GAAP earnings, and says it has now received substantially all of its refunds with no material claims outstanding. Kohl's received approximately 150 million, of which about 100 million benefited cost of merchandise sold, with a portion recorded as a reduction of inventory, shared with vendors and invested in customer value. Academy Sports and Outdoors reports a net effect of 6 cents a share 'including reinvestments', and its cash-flow statement carries a line for a loss on tariff refund monetization of 61.8 million dollars beside a remittance of tariff refund claims of 72.2 million; the release does not explain the terms of the monetization. AutoZone's 145 basis points of fourth-quarter gross margin came without a dollar figure. ^{[12, 14, 13, 15]}

The process behind every figure is Customs' CAPE, the Consolidated Administration and Processing of Entries, inside its Automated Commercial Environment: importers of record and their brokers file declarations as CSV files from verified accounts with bank details on file, and the refund arrives by ACH with interest under 19 U.S.C. 1505. Customs' page, last updated on 2 September, describes phase one, for unliquidated entries and entries within 80 days of liquidation, and phase two, for entries flagged for reconciliation; it does not yet describe phase three, which Brandon Lord, the executive director of Customs' trade programs, has said will 'allow importers of record to request IEEPA tariff refunds on entries that have been liquidated for more than 80 days' from 6 October, and only for importers that are plaintiffs in pending cases before the Court of International Trade. Supply Chain Dive reported from the same court filing that phase three covers roughly 11.4 billion dollars, 6.9 percent of the IEEPA tariffs, for importers that submitted valid importer numbers by 31 July, and that the filing counted 286,044 declarations covering 27.2 million entries as of 11 September. ^{[3, 4, 17, 16]}

Who it reaches

Every company in this chapter is direct: the figures above are its own, in the release named in its tag with the date it was filed, and each has a file on this site with its record. Read together, the releases sort the money three ways. Kept in earnings: Target's 1.65 dollars runs through both its reported and its adjusted earnings, and Dollar Tree's 1.31 does after 37 million of reinvestment. Passed on: Costco says the majority of future refunds will go to member value and cut prices in the quarter; Macy's is investing 96 of its 116 million; Kohl's shared a portion with vendors and customers; Gap committed 95 million to vendors and Williams-Sonoma 47.5 million to vendors and 10 million to staff; TJX set 112 million aside for compensation. Sold on: Academy's cash-flow statement is the only one of the ten with a monetization line, which means the claims, or some of them, were turned into cash before Customs paid. ^{[1, 2, 6, 10, 11, 14, 8, 9, 7, 13]}

The timing differs by company because the phases reach different entries. Dick's and Williams-Sonoma say they have substantially all they are owed; Gap expected the rest of its 512 million in the third quarter; Costco has a third of what it expects. A company whose entries were liquidated more than 80 days before it acted can only reach them through the court, and only if it sued. ^{[12, 9, 8, 2, 4]}

Where the sources disagree

On what the refund is worth. Each release names a different measure: cash received, the gross benefit to cost of sales, the net benefit after what was given back, or the per-share effect, and some name only basis points. Costco's 15 cents is net of reinvestment; Target's 1.65 dollars is gross; TJX's 14 cents is net of compensation; AutoZone gives no dollars at all. The desk has kept each company's own measure in its tag rather than force them onto one line. ^{[1, 6, 7, 15]}

On whether it is income. Under the accounting rules every one of the ten put the refund through cost of sales, so it lifts gross margin, and that is the number the retailers' comparisons rest on. Most then take it out again in their adjusted figures, as TJX, Williams-Sonoma, Dick's and Gap do; Target keeps it in adjusted earnings; Costco calls it non-recurring and gives the net figure. A reader comparing margins across the sector this quarter needs the note under each table. ^{[7, 9, 12, 8, 6, 1]}

On whose money it is. Customs pays the importer of record, because that is who paid the duty, and its page says so. The releases show the importers deciding for themselves what part belongs to the vendors that absorbed tariff costs, to the staff that worked through them, and to the customers who paid the prices; Costco and Macy's put most of it toward the customers, Gap and Williams-Sonoma toward the vendors, TJX toward the staff, and Target toward its shareholders' earnings. None of these is the law's answer; the law's answer is the importer. ^{[3, 1, 11, 8, 9, 7, 6]}

What settles it next

The dated records to read. Phase three of CAPE on 6 October, for plaintiffs only, and Customs' next progress report to the Court of International Trade, each with a new count of declarations, entries and dollars. Costco's first quarter, in December, which will carry the next of the two-thirds it still expects. The third-quarter releases of the retailers above, most of them in November, which will show whether the reinvestment lines Macy's and Dollar Tree have guided to are spent as described. And the filings on EDGAR, where a search for 'IEEPA' with 'refund' in current reports is the index to every company that names a figure; this chapter's search ran to 24 September. ^{[4, 17, 2, 11, 10, 5]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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