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July 19, 2024
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Costco’s outgoing finance boss gives a clue to the fate of the famous $1.50 hot dog and soda combo he introduced 40 years ago


  • Richard Galanti is known for retaining the $1.50 price tag on the hot dog and soda combo
  • He is leaving this month – leaving fans wondering if Costco will raise the price

Costco’s finance chief is stepping down after 40 years – and he gave an interview this week on a topic that members are obsessed with.

Richard Galanti is known for retaining the $1.50 price tag on the company’s famous hot dog and soda deal.

The fan favorite food and drink 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.’ 

But ths week, he gave a less definite answer when he was interviewed by Bloomberg

Costco's $1.50 hot dog and soda is a huge hit with members and has been the same price for decades

Costco’s $1.50 hot dog and soda is a huge hit with members and has been the same price for decades

Costco's long-time finance chief Richard Galanti is stepping down after nearly 40 years in the role. In a 2022 earnings call he told analysts that the $1.50 price for the hot dog and soda combo was 'sacrosanct' and would remain at that level 'forever'

Costco’s long-time finance chief Richard Galanti is stepping down after nearly 40 years in the role. In a 2022 earnings call he told analysts that the $1.50 price for the hot dog and soda combo was ‘sacrosanct’ and would remain at that level ‘forever’

This week, he was asked: ‘What will happen to the $1.50 hot dog and soda combo when you are gone?’

His reply was: ‘It’s probably safe for a while.’

That is not as clear as the outlook he gave in 2022 – when he called the deal ‘sacrosanct’.

Costco fans will now be looking for a clearer answer from Gary Millerchip, the former Kroger exec who is taking over as CFO. 

He is next likely to speak at Costco’s next quarterly earnings expected in June. 

Galanti also explained in the interview why he stayed as chief finance officer for 39 years.

He said: ‘My tenure dwarfs the average tenure of a CFO, which is something like four or five years in the Fortune 500. 

‘In my late 40s, I said, by the time I’m 50, I will think about retiring. 

‘And, then I looked around and there were all these 60-plus-year-olds still working, and a board with a few 70-plus-year-olds. 

‘Former board member Charlie Munger just passed away at age 99. I am convinced that staying active allows you to keep your faculties going.’ 

Costco shares took a tumble last week after it announced it fell short of sales estimates – but beat earnings thanks to shrewd cost-cutting.

Membership fees were a key source of revenue. They came in at $1.11 billion for the three months, up from $1.03 billion a year ago. It means Costco nets around $4 billion-plus a year from the fees, which are either $60 or $120 a year.

But – in last week’s earnings call – Galanti gave no clues on when membership fees will rise.

Galanti will will step down on March 15 and will be succeeded by his counterpart at Kroger's, Gary Millerchip

Galanti will will step down on March 15 and will be succeeded by his counterpart at Kroger’s, Gary Millerchip

The company hasn’t increased it annual membership fees in almost seven years.

It charges $60 for Business and Gold Star and $120 for Executive, which offers a 2 percent rebate on all Costco purchases made that year up to a total of $750.

Galanti will be stepping down as CFO on March 15, having held the position for almost 40 years.

Thursday’s earnings call was the last he will take. He told investors that since he became CFO in 1985 he has hosted all but one call.

Galanti will hand over the reins to Gary Millerchip. When membership fees are finally raised, it will be raised on his watch, Galanti said.



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