(NEXSTAR) – Gary Millerchip, Costco’s new CFO and executive vice president, shared a candid message with investors and analysts during his first-ever Costco earnings call Thursday afternoon.
“To dispel some recent media speculation, I also want to confirm that the $1.50 hot dog price is safe,” Millerchip said, shortly after welcoming participants to its third-quarter earnings conference call of the society.
The price of Costco’s hot dog and soda combo, at $1.50, has remained unchanged since the item was added to menus in the mid-1980s. But recent comments from Richard Galanti, former Costco chief financial officer , have left some consumers uncertain about the item’s future.
Galanti, like Millerchip, had frequently discussed the price of the combined deal during Costco’s quarterly earnings calls, and once remarked in 2022 that the $1.50 price would stay in place “forever.” However, earlier this year, Galanti appeared to indicate that Millerchip might eventually raise the price, telling Bloomberg that the combined deal’s price of $1.50 might only be “probably safe for a while” after he leaves.
The history of Costco’s popular hot dog — and its unchanged price — dates back to Costco co-founder James Sinegal, according to former Costco CEO Craig Jelinek.
“I came to (Sinegal) once and said, ‘Jim, we can’t sell this hot dog for fifty dollars.’ We’re losing our backs,” Jelinek recalled in a 2018 interview with 425 Business. “And he said, ‘If you lift the damn hot dog, I’ll kill you.’ Understand it.’
The company soon began making its own hot dogs (instead of buying them elsewhere) to cut costs, Jelinek said.
Galanti also said during a previous earnings conference call that revenue from other areas of Costco’s business helped keep food court costs lower. If true, it’s possible that the $1.50 hot dog deal will remain in effect for the foreseeable future: In its latest earnings report, Costco reported a 9.1% increase in sales compared to the third quarter of 2023, exceeding expectations.
“We’re seeing wins in several different categories,” Costco CEO Ron Vachris said Thursday.
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