Costco Wholesale is putting a $2.2 billion wad of cash back in the pockets of shareholders through a special dividend announced Friday.
The largesse comes at a time of relative good fortune for the warehouse-club chain, which has seen revenue and traffic frequency rise even as many other brick-and-mortar retailers, including archrival Wal-Mart, suffer from tepid consumer demand.
The tailwind has enabled Costco to stockpile more than $7.6 billion in cash. The $5-per-share distribution will be funded through its cash hoard and additional debt. Costco has about $5 billion in existing long-term debt.
CFO Richard Galanti said in an interview that the move was “just another form of returning to the shareholders what’s theirs.”
“We’re blessed we’re continuing to generate earnings and cash flow,” he said.
This is the second special dividend from Costco in recent memory; the last one was a $3 billion payment in December 2012, when the company tried to get ahead of potential tax changes. The latest dividend comes on top of a quarterly dividend of 35.5 cents per share announced Thursday.
On Friday, Costco shares rose $2.35, or 1.7 percent, to $142.99.