Costco's delivers big special dividend

The company will pay out $4.4B

Costco Wholesale Corp. will pay shareholders a special dividend of $10 per share, the company’s board of directors announced Monday.

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The $4.4 billion payout, which will be made to shareholders of record as of Dec. 2, is the fourth special dividend issued by the board in the past eight years. Shareholders were most recently awarded a special dividend in April 2017.

TickerSecurityLastChangeChange %
COSTCOSTCO WHOLESALE CORPORATION384.22+2.51+0.66%

“Our strong balance sheet allows us to pay this dividend, while preserving financial and operational flexibility to continue to grow our business globally,” Costco CEO Richard Galanti said in a statement.

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The Issaquah, Washington-based wholesaler on Sept. 24 reported its fourth-quarter profit rose 25% year-over-year to $1.39 billion, or $3.13 per share. Sales at stores open at least 12 months rose 14% as shoppers loaded up on groceries and cleaning supplies and splurged on home furnishings.

That was nearly double the previous quarter when comparable sales increased 7.8% as shoppers hunkered down at home while riding out the COVID-19 pandemic. Those who did visit stores were limited by social-distancing guidelines and limits on the quantities of some purchases due to hoarding amid the pandemic.

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The company was one of the few to raise its dividend amid the pandemic, lifting its quarterly payout from 65 cents to 70 cents per share in April.

Costco shares were up 29% this year through Monday, outperforming the S&P 500’s 12% gain.