Gary Millerchip, Costco’s new CFO and senior vice president, delivered a candid message to investors and analysts on his first earnings call on Thursday afternoon.
During the company’s Q3 earnings call, Millerchip clarified recent media speculation and reassured attendees that the price of the $1.50 hot dog will remain unchanged.
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“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” Millerchip said shortly after introducing guests to the company’s third-quarter earnings call.
Since its addition to menus in the mid-1980s, Costco’s hot dog-and-soda combo has maintained a constant price of $1.50. However, recent statements from Richard Galanti, Costco’s former CFO, have left some customers unsure about the item’s future.
Galanti, like Millerchip, had repeatedly mentioned the pricing of the combo package during Costco’s quarterly earnings calls and once stated in 2022 that the $1.50 price would be in place “forever.” Earlier this year, however, Galanti appeared to imply that Millerchip may potentially raise the price, telling Bloomberg that the $1.50 combo deal’s pricing might only be “probably safe for a while” after his departure.
Former Costco CEO Craig Jelinek attributes the origins of Costco’s iconic hot dog and its unchanging pricing to co-founder James Sinegal.
“I approached [Sinegal] and said, ‘Jim, we can’t sell this hot dog for fifty bucks.'” We’re losing our rear ends.” In a 2018 interview with 425 Business, Jelinek remembers this. “And he shouted, ‘If you lift that effing hot dog, I’ll kill you.” Figure it out.”
To save money, the company quickly started making its own hot dogs (rather than procuring them elsewhere), according to Jelinek.
In prior earnings calls, Galanti stated that revenue from other Costco businesses helps to keep food court prices low. If this is accurate, it’s feasible that the $1.50 hot dog deal will continue for the foreseeable future. Costco’s recent financial report showed a 9.1% growth in sales over the third quarter of 2023, exceeding forecasts.
“We’re seeing wins in several different categories,” Costco CEO Ron Vachris said on Thursday.
