Costco’s finance chief is stepping down – after being in the role since the retailer was just two years old.
Richard Galanti is known for his dedication to keeping membership fees low and retaining the $1.50 price tag on the company’s famous hot dog and soda deal.
The fan favorite combo has been the same price since 1985 – the same year Galanti was named chief financial officer – and two years after the first Costco opened.
In a 2022 earnings call Galanti told analysts that the $1.50 price was ‘sacrosanct’ and would remain at that level ‘forever.’
The announcement of his departure comes as the retailer weighs up a potential increase in membership fees.
Costco’s long-time finance chief Richard Galanti is stepping down after nearly 40 years in the role, the company has announced
Costco has charged between $60 and $120 a year for membership since June 2017 – and previously increased prices around every five years.
The veteran finance chief will step down on March 15 and will be succeeded by his counterpart at Kroger’s, Gary Millerchip.
Galanti has been credited by analysts as crucial to the company’s growth in recent years.
He has overseen years of strong sales growth, as other retailers have struggled with the Covid-19 pandemic, changing consumer behavior and the closure of many brick and mortar retailers.
The company’s latest earnings report for the quarter ending November 26, 2023, showed profit rising to $1.59 billion, compared with $1.36 billion a year earlier.
Total revenue for the three-month period also increased around 6 percent to $57.8 billion, and household members rose 7.6 percent from the year prior.
The numbers with Galanti as CFO ‘speak for themselves,’ Rupesh Parikh, a senior analyst of food, grocery and consumer products at Oppenheimer & Co., told The Wall Street Journal.
Costco shares, which surged 47.8 percent in 2023, were down marginally in early trading following the news.
It comes months after the company also announced the appointment of a new CEO – and the departure of boss Craig Jelinek.
Ron Vachris, a former forklift driver who started working for the company in 1982, took the position on January 1 – becoming the second person to take the top job at Costco after its co-founders.
The veteran financial chief will step down on March 15 and will be succeeded by his counterpart at Kroger’s, Gary Millerchip
Galanti has been credited by analysts as crucial to the company’s growth in recent years
The news comes as the retailer weighs up a potential increase in membership fees
The external hire of Millerchip is a departure from Costco’s tendency to promote from within the ranks of the company.
He is likely to have to field questions about a much-anticipated hike in membership fees – which are a bulk driver of profits for the retailer.
There have been a total of seven membership fee hikes since Costco’s founding in 1983 – each time by $5. On average hikes take place once every five years or so.
The longest period over which the annual membership fee has remained unchanged was between 1983 and 1992.
Current fees have not changed since 2017 – so analysts expect a hike is likely this year.
‘While we’ve gone a little longer than the average increase, we feel we certainly have driven more value to the membership,’ Galanti told analysts in December said.
‘I’ll use my standby answer, my answer is it’s a question of when, not if. But at this juncture, we feel pretty good about what we’re doing.’