The $7-a-share distribution, to be paid on May 26, will be funded primarily from additional borrowings, the company said. It comes in addition to a regular quarterly dividend of 50 cents a share.
Costco Wholesale, the warehouse-club chain that’s largely avoided the retail industry’s distress, plans to return $3.1 billion to shareholders through the payment of a special dividend.
The $7-a-share distribution will be funded primarily from additional borrowings, the company said Tuesday. The special dividend will be paid on May 26 and comes in addition to a regular quarterly dividend of 50 cents a share that was also declared Tuesday.
The investor windfall underscores Costco’s status as a standout in U.S. retail, which is suffering from the acceleration of online shopping and a glut of physical stores. Excluding fuel, the company’s U.S. same-store sales jumped 6 percent in March, topping the 3.1 percent gain that analysts had projected.
Costco shares rose as much as 3.1 percent to $178 in extended trading Tuesday.
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“Our strong balance sheet and favorable 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,” Chief Financial Officer Richard Galanti said in the statement.
The special dividend is the first such payment since the Issaquah-based retailer handed back $2.2 billion in January 2015. Costco’s regular quarterly dividend, meanwhile, was boosted 11 percent from 45 cents a share.
The company’s cash and cash equivalents rose 40 percent in the first half of its fiscal year to $4.7 billion.