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Richard Galanti, Costco’s CFO since 1985 and the warehouse club’s primary spokesperson, announced plans to retire. He will be succeeded by Kroger’s former CFO, Gary Millerchip, effective March 15.
The change comes as Craig Jelinek, Costco’s CEO since 2012, stepped down at the start of the year, succeeded by Ron Vachris, the former president and a 42-year Costco veteran.
In an internal email viewed by The Wall Street Journal, Vachris described Galanti as “the primary Costco ‘voice’ to Wall Street and others.”
Galanti was often the only executive leading Costco’s quarterly earnings calls with analysts. Chuck Grom, a managing director at Gordon Haskett Research Advisors, told the WSJ, “Richard Galanti is the face of the company for a lot of people.”
Veteran Wall Street analyst Walter Loeb wrote in a Forbes column, “Galanti joined Costco when it had four stores and his leadership was felt at meetings he chaired. He knows every detail of the operation and was quick to point out growth patterns.”
Galanti also often earned media headlines for calling out Costco’s “colorful tidbits,” including noting on an analyst call this past December that Costco’s warehouses in the U.S. sold over 4 million pies in the three days before Thanksgiving.
In 2014, he said Costco was willing to sacrifice “$30 million, $40 million a year on gross margin” to keep its rotisserie chickens at $4.99 to emphasize value, according to CNN. In 2022, Galanti earned extensive press coverage for saying that despite soaring inflation at the time, healthier margins in other categories would help Costco maintain its $1.50 hot dog and soda combo “forever.”
Costco shares have soared 230% over the past five years, outpacing the gains of 83% for the S&P 500 and 77% for Walmart over the same period.
Galanti will remain with Costco through January 2025 in an advisory role to support the transition and will remain on the company’s board. Vachris said in a statement, “Over his nearly forty-year tenure as chief financial officer at the company Richard has made innumerable and invaluable contributions to its success.”
While minimal change is expected, investors will be exploring whether the revamped leadership team will make adjustments to its membership fee strategy, continue its crackdown on membership sharing, and move away from reporting monthly sales. Costco is weighing its first increase in membership fees since 2017.
For Kroger, Millerchip’s exit was seen as a setback as the grocer waits for regulators’ ruling on its proposed merger with Albertsons amid related litigation. Millerchip joined Kroger in 2008 as chief executive of Kroger Personal Finance, became CFO in 2019, and was among two executives guiding integration planning with Albertsons. Kroger named Todd Foley, corporate controller and chief accounting officer, as interim CFO while launching a search for a successor.