Costco (NASDAQ:COST) may produce more items under its Kirkland Signature brand to offset tariff-induced costs, company officials said recently.
"We continue to work closely with our suppliers to find ways to mitigate the impact of tariffs," Costco CFO Gary Millerchip during the company's fiscal Q4 earnings call in late September. "This includes leaning into KS items and increasing domestically sourced goods. Examples include an increased emphasis on items in health and beauty, live goods, tires, and mattresses."
Company executives throughout the call said they use multiple strategies to avoid passing price hikes on to its members. "So it is all hands on deck and we addressed this like we would any commodity increase, and we use the different tools we have to try and mitigate any price increase for any reason," Costco CEO Ron Vachris said.
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Kirkland Signature is growing already
Leaning into the Kirkland Signature brand could likely be a wise financial move for Costco, regardless of tariffs. The private label brand contains multiple items with similar quality to name brands, but at a lower price point, leading it to become one of Costco's best sellers.
Kirkland Signature accounts for a third of Costco's overall revenue, The Wall Street Journal reported earlier this year.
"Kirkland Signature sales penetration continued to increase, bringing an even more high-quality value to our members while offsetting potentially inflationary impacts from tariffs," Vachris said in September.
Company officials did not provide specific numbers on Kirkland Signature's growth during the call.
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More than 30 Kirkland Signature items were launched in Costco's last quarter, Millerchip said. The company will look at "gaps" in items members are looking for when deciding future items.
"We don’t have a specific target for Kirkland Signature," Millerchip said. "It really is about when there’s that value and that opportunity there with the member."
One of the most popular and best-selling Kirkland Signature items is the 30-roll toilet paper pack. Costco sold enough toilet paper in fiscal 2025 to reach the moon and back over 200 times, according to Millerchip.
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Costco's tariff fight
Costco's $86.16 billion in Q4 revenue was slightly higher than Wall Street's expectations, according to CNBC.
The big-box warehouse has weathered recent tariff implementations fairly well due to its supply chain management and ability to change product sourcing, company executives said on the recent earnings call.
"We are continuing to look at opportunities to move more KS product sourcing into the countries and regions where the items are sold and this is helping to lower cost as well as reduce emissions from transporting goods around the world," Vachris said.
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