25.04.201723:14:00UTC+00Costco to Issue Special Dividend to Investors

Costco Wholesale Corp. will return $3.1 billion to shareholders via the issuance of a special dividend.

The $7-a-share payout will be financed primarily by more borrowings, according to the company. The special dividend will be given on May 26 and in addition to the regularly issued dividend of 50 cents per share that was also announced.

The warehouse-club chain said it will fund the payout via additional borrowings which comes as interest rates continue to be at record-lows, despite the Fed signalling its plans to hike rates at a steadier pace.

The payout emphasizes Costco's ability to weather the sluggish conditions of the U.S. retail industry, which has been hit by the increasing popularity of online shopping and a glut of physical stores. The firm's same-store sales in the U.S. surged 6 percent in March, exceeding the 3.1 percent increase estimated by analysts. The firm's cash and cash equivalent jumped 40 percent in the 1H of the fiscal year to $4.7 billion.