This browser does not support the Video element.
What causes inflation?
There are three factors that could lead to inflation which include demand-pull inflation, cost-push inflation and built-in inflation.
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.
"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.
FILE - Close-up of signs listing prices at Costco food court, including the price for Costco's hot dog and fountain soda combination, in Danville, California, on July 3, 2022. (Photo by Smith Collection/Gado/Getty Images)
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.
FLORIDA COSTCO RUNS OUT OF TOILET PAPER, PAPER TOWELS AS STORM BREWS
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.
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.
CLICK HERE TO GET THE FOX BUSINESS APP
For the year, the company reported a profit of $5.84 billion, or $13.14 per share. Revenue was reported as $226.95 billion.
Get updates to this story on FOXBusiness.com.