Costco Exec: 'We Want To Be The Last To Raise' Prices From Tariffs

Costco Wholesale Corporation COST CFO Richard Galanti said during the company's post-earnings conference call Thursday afternoon prices in stores will go up from tariffs but it's "hard to predict" the impact, Reuters reported.

What Happened

Ongoing U.S.-China trade tensions prompted Costco to take steps to mitigate the financial impact to consumers by sourcing products from other countries and/or possible price increases.

For the time being, the situation is "pretty fluid" and management is taking steps to speed up shipments before incremental tariffs come online, Reuters quoted Galanti as saying.

Why It's Important

Costco is unlikely to completely absorb higher prices and the executive said "prices will go up on things." The company wants to not only be "the last one" to raise prices, but "the first" to lower them when the situation improves.

"We're not afraid to use some of those monies to again drive business," the executive said.

Daniel Martins, the founder of DM Martins Research, told Reuters that Costco's bargaining power and ability to source products worldwide makes it better positioned to "deal with the challenges" compared to its rivals over time.

Costco traded about 1.8 percent at $237 per share Friday morning.

Related Links:

'Fast Money' Traders Share Their Thoughts On Costco

Costco Reports Q3 Earnings Beat, Comps Up 5.5%

Photo credit: Tony Webster, via Wikimedia Commons