Costco shareholders are getting a special treat on May 26.
In addition to raising the company’s quarterly dividend by five cents to $US0.50 cents a share, the wholesaler announced a special cash dividend of $US7 per share to shareholders of record by the market close on May 10.
The special dividend is 14 times the regular quarterly dividend and will cost the company $US3.1 billion, according to a press release.
So while most retailers are scrambling just to keep their doors open and are urgently counting every penny, it looks like management at Costco wants to show investors that the “retail apocalypse” hasn’t touched the wholesale giant.
In fact, shares of Costco are up 15% over the past year.
“Today’s announcement of a $US7.00 special dividend is our latest step in returning capital to our shareholders,” Richard Galanti, Costco Executive Vice President and Chief Financial Officer said in the release. “Our strong balance sheet and favourable access to the credit markets allow us to provide shareholders with this dividend, while preserving financial and operational flexibility to continue to grow our business globally.”
According S&P Global, the last time a retailer announced a special dividend was in February 2016, when Best Buy announced a much smaller dividend of 45 cents.
Shares of Costco are reacting positively to the announcement, up more than 2% at $US176.18. They have gained 10.4% so far in 2017 and are just below their all-time high of $US178.71 set on March 1.