Costco to spend $3 billion on special $7 dividend

Associated Press Modified: November 28, 2012 at 6:15 pm •  Published: November 28, 2012
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Costco will spend $3 billion to pay a special dividend of $7 per share next month ahead of higher tax rates that may kick in come January.

Many companies are making special end-of-year dividend payments or moving up their quarterly payouts because investors will have to pay higher taxes on dividend income starting in 2013, unless Congress and President Barack Obama reach a compromise on taxes and government spending.

The Issaquah, Wash., company said Wednesday that the special dividend will be payable Dec. 18 to shareholders of record Dec. 10. In addition, Costco Wholesale Corp. will pay its regular quarterly dividend of 27.5 cents per share on Nov. 30 to shareholders of record as of Nov. 16.

Costco also said Wednesday that its November revenue climbed nearly 9 percent to $8.15 billion. Revenue from stores open at least a year rose 6 percent. That increase would have totaled 5 percent excluding gains from gasoline price inflation and stronger foreign currencies. Sales were strongest in Texas, the Midwest and the southeastern U.S., as well as Canada and Mexico, the company said on a conference call. Customers snapped up candy, cooler and deli items and Costco said hardware, health and beauty and women's apparel categories also performed well.

Several Costco warehouses were closed during part of the month due to power outages stemming from Superstorm Sandy. The company estimated on the call that the storm trimmed 0.5 percent from sales of stores open at least a year. Revenue from stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.



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