(NEXSTAR) – Gary Millerchip, Costco's new CFO and executive vice president, shared a candid message with investors and analysts Thursday afternoon during his first-ever Costco earnings call.
“To clear up some recent media speculation, I would also like to confirm that the $1.50 hot dog price is safe,” Millerchip said, shortly after welcoming attendees to the company celebrations. Q3 earnings call.
The price of Costco's hot dog and soda combo, $1.50, has remained unchanged since the item was added to menus in the mid-1980s. But recent comments from Richard Galanti, Costco's former CFO, left some consumers feeling unsure about the future of the item.
Galanti, like Millerchip, had frequently discussed the price of the combo deal during Costco's quarterly earnings calls, once noting in 2022 that the $1.50 price would remain in place “forever.” Earlier this year, however, Galanti seemed to indicate that Millerchip might raise the price, tellingly Bloomberg that the $1.50 combo deal price might only be “probably safe for a while” after his departure.
The story behind Costco's popular hot dog — and its unchanging price — can be traced back to Costco co-founder James Sinegal, according to former Costco CEO Craig Jelinek.
“I came to [Sinegal] I once said, 'Jim, we can't sell this hot dog for fifty dollars. We are losing our backside,” Jelinek recalled in a 2018 interview with 425 Business. “And he said, 'If you bring up the damn hot dog, I'll kill you. Figure it out.'”
The company soon began producing its own hot dogs (rather than sourcing them elsewhere) to keep costs down, Jelinek said.
Galanti had also said in previous earnings calls that revenue from other sectors of Costco's businesses helps keep costs lower at the food court. If that's true, it's possible the $1.50 hot dog deal will remain in place for the foreseeable future: In its latest earnings report, Costco reported a 9.1% increase in sales from the third quarter of 2023, which exceeded expectations .
“We're seeing wins in several categories,” Costco CEO Ron Vachris said Thursday.
