Richard Galanti, CFO of Costco, has been the voice of the company's earnings calls for over 30 years. He's known for mixing business talk with humor. Galanti announced the end of his era during Costco's recent second-quarter earnings call. He expressed gratitude for the opportunity to share Costco's journey, highlighting the company's successes and challenges.
"I'd like to take a moment to say thank you to many of you who have tuned into each quarter, some for many years, to allow me to share with you Costco's results, both our ups and our downs and, thankfully, many more ups and downs and provide some fun and informative color on how we're doing along the way," he said.
Since Costco's IPO in December 1985, Galanti has hosted nearly all earnings calls. He cherishes the privilege of guiding stakeholders through Costco's financials. Membership fee questions often arise during calls, as Costco typically raises fees every five to six years. The last increase was in 2017, sparking speculation about an imminent hike.
In Galanti's final call, he addressed the membership fee question one last time. Despite Wall Street's expectations, Costco had a solid quarter. Sales and membership grew, showcasing the company's health. Yet, shares dropped significantly, marking Costco's biggest decline since May 2022.
Galanti provided detailed membership statistics, highlighting strong renewal rates and growth. The conversation returned to potential fee increases. Galanti maintained his usual stance, suggesting a price hike is a matter of "when, not if."
He elaborated more on the conditions for increasing fees, emphasizing performance and customer loyalty. Galanti concluded that any decision on fee hikes would not be based solely on economic factors. He reassured stakeholders that Costco would make a careful, well-timed decision.
"In terms of renewal rates, at the second-quarter end our U.S. and Canada renewal rate came in at 92.9%, which is up 0.1% from Q1 and 12 weeks earlier, and the worldwide rate came in at 90.5% similar to the last quarter," he said.
"Membership growth continues. We ended the second quarter with 73.4 million paid household members, up 7.8% versus last year, and 132 million cardholders, up 7.3%, with continuing growth throughout the quarters."
Galanti, 67, will pass the CFO baton to Gary Millerchip, former Kroger CFO, on March 15. His departure marks the end of an era at Costco, leaving a legacy of straightforward communication and steady growth.
