The company’s new CFO and executive vice president, Gary Millerchip, gave a direct speech to analysts and investors during his first-ever Costco earnings call on Thursday afternoon.
Millerchip stated, “To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” just after extending a warm greeting to guests for the company’s Q3 earnings call.
When the item was added to menus in the middle of the 1980s, Costco’s hot dog and Coke combo cost $1.50. This pricing has not altered. However, several customers are unsure about the item’s future after reading remarks made recently by Richard Galanti, the former CFO of Costco.
Galanti had, like Millerchip, regularly brought up the combination deal’s price during Costco’s quarterly earnings calls. In 2022, he even declared that the $1.50 price would be the same “forever.”
Though Galanti told Bloomberg earlier this year that the $1.50 combination deal’s pricing might only be “probably safe for a while” after his departure, it seemed as though Millerchip might raise the price.
According to former Costco CEO Craig Jelinek, Costco co-founder James Sinegal is the man behind the company’s well-known hot dog and its fixed price.
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“I came to [Sinegal] once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends,'” Jelinek recalled in a 2018 interview with 425 Business. “And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.'”
In an effort to save costs, the company quickly started producing its own hot dogs rather than obtaining them from outside sources, according to Jelinek.
Additionally, Galanti had stated in earlier earnings calls that the food court’s expenses are kept down by revenue from other areas of Costco’s company.
If verified, there’s a chance that the $1.50 hot dog offer will stand for the time being: Costco exceeded expectations by reporting a 9.1% growth in revenue for the third quarter of 2023 in its most recent earnings report.
“We’re seeing wins in several different categories,” Costco CEO Ron Vachris stated on Thursday.
