Costco CFO reveals whether historic inflation will raise price of hot dog and soda combo
Costco CFO Richard Galanti said the company's gas and travel sectors allowed the company to make up for the lost at the food court
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Costco CFO Richard Galanti revealed last Thursday that its famous hot dog-and-soda combo deal of $1.50 will remain in place despite record-high inflation.
At an earnings call, Galanti said the profit margins the company is seeing in the gas and travel sectors allow Costco to make up for losses at the food court.
Close-up of signs listing prices at Costco food court, including the price for Costco's hot dog and fountain soda combination, Danville, California, July 3, 2022. (Smith Collection/Gado/Getty Images / Getty Images)
"Those things help us be more aggressive in other areas, or as you mentioned, hold the price on the hot dog and the soda … forever," Galanti told an analyst from Truist Securities.
Galanti said Costco was fortunate in that it did not struggle like other businesses during the COVID-19 pandemic.
"The enormity of the improvement in the bottom line … we’re better than we were two years ago," he said.
The retailer’s famous $1.50 hot dog-and-soda combo has remained unchanged since it was first introduced in the 1980s. The company was forced, however, to raise the price of its 20-ounce sodas from $0.59 to $0. 69, and its chicken bake from $2.99 to $3.99.
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The news comes on the heels of a Bureau of Labor Statistics report indicating that the price of consumer goods last month was up 8.3% year-over-year.
At its earnings call last week, Costco reported fiscal fourth-quarter earnings of $1.87 billion, a profit of $4.20 per share.
Costco's classic hot dog and drink combo price remains unchanged despite historically high inflation. ( Getty Images / Getty Images)
The results topped Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of $4.12 per share.
The warehouse club operator posted revenue of $72.09 billion in the period, also exceeding Street forecasts. Eight analysts surveyed by Zacks expected $71.84 billion.
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For the year, the company reported profit of $5.84 billion, or $13.14 per share. Revenue was reported as $226.95 billion.
The Associated Press contributed to this report.