Costco plans special cash dividend payout on Dec.7; November sales beat Street

Issaquah, Wash. -- Costco Wholesale Corp. on Wednesday said it will pay a special dividend worth some $3.0 billion to investors, sending cash to its shareholders ahead of a likely increase in the dividend tax. The chain also posted monthly same-store sales that beat analysts' expectations.

“Our strong balance sheet and favorable access to the credit markets allow us to provide shareholders with this dividend,” Costco CFO Richard Galanti said in a statement.

Costco reported net sales of $8.15 billion for the month of November, up 9% from $7.51 billion during the similar four-week period last year. Total same-store sales  for the period rose 6%. The increase was 5% excluding gains from gasoline price inflation and stronger foreign currencies.

For the first fiscal quarter of its 2013 fiscal year (from Sept. 3 through Nov. 25, 2012), the company reported net sales of $23.21 billion, an increase of 10% from $21.18 billion in the first fiscal quarter of 2012. Total same-store sales for the period increased 7%.

In deciding to make the special payout, Costco joins a growing list of  companies that have recently declared end-of-year dividend payments or moving up their quarterly payouts because investors may have to pay higher taxes on dividend income starting in January, with the likely increase in the dividend tax rate due to the so-called “fiscal cliff.”