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Costco Plans to Expand Kirkland Signature Line as Tariff Shield

MarketDash Editorial Team
17 days ago
Facing tariff pressures, Costco is doubling down on its wildly successful Kirkland Signature brand. The private label already generates a third of the retailer's revenue and offers a clever way to sidestep import costs while delivering value to members.

When tariffs threaten to squeeze margins, Costco Wholesale Corporation (COST) has a simple plan: make more stuff yourself. The warehouse retailer announced it's expanding production of Kirkland Signature products as a key strategy to avoid passing tariff costs onto members.

"We continue to work closely with our suppliers to find ways to mitigate the impact of tariffs," Costco CFO Gary Millerchip explained 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."

It's part of a broader playbook the company uses to shield customers from price increases. CEO Ron Vachris put it plainly: "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."

Why Kirkland Signature Makes Perfect Sense

Expanding the Kirkland Signature line isn't just a tariff workaround. It's genuinely smart business. The private label brand has become a profit machine for Costco, offering quality comparable to name brands at significantly lower prices. Members love it, and the numbers prove it.

According to The Wall Street Journal, Kirkland Signature accounts for about a third of Costco's overall revenue. That's a staggering penetration rate for a private label. "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.

The company didn't share specific growth figures for Kirkland Signature during the call, but the momentum is clear. More than 30 new Kirkland Signature items hit shelves last quarter alone. Millerchip said the company identifies "gaps" in what members want and fills them strategically.

"We don't have a specific target for Kirkland Signature," Millerchip noted. "It really is about when there's that value and that opportunity there with the member."

To put the brand's scale in perspective, consider this: Costco's best-selling Kirkland Signature product is the 30-roll toilet paper pack. In fiscal 2025, the company sold enough toilet paper to stretch to the moon and back over 200 times, according to Millerchip. That's a lot of bathroom tissue.

Navigating the Tariff Landscape

Despite tariff headwinds, Costco posted solid results. The retailer's $86.16 billion in Q4 revenue edged past Wall Street's expectations, according to CNBC. Executives credit the company's supply chain flexibility and willingness to adjust product sourcing on the fly.

"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 explained.

It's a win-win approach: domestic manufacturing dodges tariffs while cutting transportation emissions. For a retailer obsessed with operational efficiency, shifting production closer to point-of-sale makes sense on multiple levels.

The bottom line? Costco is betting that expanding Kirkland Signature offers more than just tariff protection. It's a strategy that strengthens member loyalty, improves margins, and gives the company more control over its destiny. In an uncertain trade environment, that kind of flexibility is worth its weight in bulk toilet paper.

Back to News

Costco Plans to Expand Kirkland Signature Line as Tariff Shield

MarketDash Editorial Team
17 days ago
Facing tariff pressures, Costco is doubling down on its wildly successful Kirkland Signature brand. The private label already generates a third of the retailer's revenue and offers a clever way to sidestep import costs while delivering value to members.

When tariffs threaten to squeeze margins, Costco Wholesale Corporation (COST) has a simple plan: make more stuff yourself. The warehouse retailer announced it's expanding production of Kirkland Signature products as a key strategy to avoid passing tariff costs onto members.

"We continue to work closely with our suppliers to find ways to mitigate the impact of tariffs," Costco CFO Gary Millerchip explained 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."

It's part of a broader playbook the company uses to shield customers from price increases. CEO Ron Vachris put it plainly: "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."

Why Kirkland Signature Makes Perfect Sense

Expanding the Kirkland Signature line isn't just a tariff workaround. It's genuinely smart business. The private label brand has become a profit machine for Costco, offering quality comparable to name brands at significantly lower prices. Members love it, and the numbers prove it.

According to The Wall Street Journal, Kirkland Signature accounts for about a third of Costco's overall revenue. That's a staggering penetration rate for a private label. "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.

The company didn't share specific growth figures for Kirkland Signature during the call, but the momentum is clear. More than 30 new Kirkland Signature items hit shelves last quarter alone. Millerchip said the company identifies "gaps" in what members want and fills them strategically.

"We don't have a specific target for Kirkland Signature," Millerchip noted. "It really is about when there's that value and that opportunity there with the member."

To put the brand's scale in perspective, consider this: Costco's best-selling Kirkland Signature product is the 30-roll toilet paper pack. In fiscal 2025, the company sold enough toilet paper to stretch to the moon and back over 200 times, according to Millerchip. That's a lot of bathroom tissue.

Navigating the Tariff Landscape

Despite tariff headwinds, Costco posted solid results. The retailer's $86.16 billion in Q4 revenue edged past Wall Street's expectations, according to CNBC. Executives credit the company's supply chain flexibility and willingness to adjust product sourcing on the fly.

"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 explained.

It's a win-win approach: domestic manufacturing dodges tariffs while cutting transportation emissions. For a retailer obsessed with operational efficiency, shifting production closer to point-of-sale makes sense on multiple levels.

The bottom line? Costco is betting that expanding Kirkland Signature offers more than just tariff protection. It's a strategy that strengthens member loyalty, improves margins, and gives the company more control over its destiny. In an uncertain trade environment, that kind of flexibility is worth its weight in bulk toilet paper.