Costco CEO Ron Vachris used the retailer's fourth-quarter earnings call to announce 33 warehouse openings for fiscal 2027 and explain how tariff refund dollars were funneled back to members through price cuts on groceries and household goods.
Vachris laid out the expansion plan on September 24, confirming that Costco would push past its long-standing annual target of roughly 30 net new locations. Of the 33 planned warehouses, five are relocations, leaving 28 net new stores, a pace that signals the company sees plenty of room to grow even as other retailers pull back on brick-and-mortar investment.
The CEO named Buffalo, New York, and Lawrence, Kansas, as two of the new U.S. markets on the company's radar. Both cities currently lack a Costco warehouse, and Vachris framed the expansion as a membership play.
"We're confident in the return on investment in all the buildings we open, with new markets bringing more new members."
That confidence comes with a price tag. The New York Post reported the fiscal 2027 buildout will cost approximately $7.5 billion, a step up from the $6.4 billion Costco spent on capital projects in fiscal 2026, which ended with 939 total warehouses worldwide.
Costco had already announced 26 locations for fiscal 2026, and at least ten new U.S. warehouses were slated to open before year's end. Fourteen more locations across the United States and Canada are listed as "coming soon," with openings scheduled through October and November.
The expansion news shared the earnings call with a question that has dogged major retailers for months: what happened to the tariff refunds?
After the Supreme Court ruled some tariff levies unlawful, companies across the economy began filing for refunds with U.S. Customs and Border Protection. As of July 31, CBP had received more than 252,000 refund applications. More than 40 S&P 500 companies reported collecting roughly $9.6 billion in tariff refunds over recent months, with Apple pulling in approximately $2.2 billion and Nike receiving $986 million, as The Sun detailed citing Wall Street Journal figures.
For Costco, the question carried extra weight. Consumers had filed lawsuits seeking a share of the refunds, and earlier this spring Vachris acknowledged the situation was "still too unpredictable." He said at the time that the company had done its best to "not pass the full cost" of tariffs onto members before the court stepped in.
By the fourth-quarter call, Vachris had a clearer answer. Costco received initial tariff refunds during the quarter and chose to reinvest those dollars directly into member-facing price cuts rather than bank the windfall.
Vachris told analysts the reinvestment came "predominantly through price reductions on a number of items in the second half of the quarter, including everyday items and produce, meat, beverages, and some non-food items, such as home furnishings and hardware."
The move matters at a moment when grocery prices remain a sore point for American households. Beef and veal prices alone have climbed 9.4 percent over the past year, driven by a cattle shortage, severe droughts, and rising fuel and fertilizer costs, according to NerdWallet data cited in the same report.
While other big-box chains have slowed store growth or shifted spending toward e-commerce, Costco is pouring billions into physical warehouses. The 33-store fiscal 2027 plan exceeds its own stated goal of 30 net new locations per year and follows a fiscal 2026 in which the company was already building aggressively.
The strategy rests on a simple premise: new buildings bring new members, and membership fees, not razor-thin product margins, drive Costco's profit engine. Executive-level memberships continue to rise, and the company is also expanding its delivery partnership to all U.S. states, adding a convenience layer on top of the warehouse model.
Costco's product lineup keeps evolving alongside the expansion. The company recently pulled its award-winning Kirkland Signature beer from shelves for good, while its food courts have drawn fresh attention after bringing back the Twisted Churro for a limited run.
Vachris did not disclose the exact dollar value of tariff refunds Costco received or the total savings passed along to members. The status of the consumer lawsuits seeking a cut of those refunds also remains unclear. Those are details worth watching, because how a company handles a government-mandated windfall says more about its priorities than any earnings slide deck.
Costco's decision to funnel tariff refund money into lower shelf prices stands in contrast to companies that quietly absorbed refunds without any visible benefit to customers. Whether the price reductions were proportional to the refunds received is a question Vachris did not answer, and the lawsuits suggest some consumers are not satisfied with the company's word alone.
CBP's 252,000-plus refund applications signal the scale of money flowing back to corporate America after the court ruling. Taxpayers and consumers who bore the cost of those tariffs through higher prices deserve to know where every dollar landed, and whether the savings made it past the boardroom.
Costco, to its credit, is at least saying the right things. Vachris went on the record, named the product categories, and tied the refunds to specific price cuts in a specific timeframe. That is more transparency than most Fortune 500 companies have offered.
In a retail landscape where consumers are squeezed and trust in corporate America runs thin, actions beat press releases. Costco is betting billions that showing up in new markets and cutting prices with windfall cash will keep members walking through the door. The bet only pays off if the follow-through matches the promise.