Investing.com -- Costco Wholesale Corporation (NASDAQ:COST) hiked its quarterly dividend modestly on Thursday in a positive development for the second-largest retailer ahead of its highly-anticipated transition to Visa credit cards later this year.
On Thursday afternoon, Costco announced that it is raising its quarterly dividend by five cents from 0.40 to 0.45. The dividend increase will be payable on May 13 to shareholders of record on April 29. Costco previously offered dividends of 0.40 in each of the last three quarters since its last dividend hike in April, 2015. In addition, Costco authorized a special dividend of $5.00 per share last January as a way of rewarding shareholders, following a successful period in which the company reported continued strength in their balance sheet and favorable access to credit markets.
In the first quarter of Costco's fiscal year, which ended in November, the company said revenues for the period increased 1% to $26.63 billion, even as earnings fell slightly from $496 million or 1.12 per share to $480 million (1.09 EPS). The company's net profits slid, as it continued to account for the costs related to its switch from American Express Company (NYSE:AXP) to Visa-branded credit cards.
While Costco initially anticipated to complete the move this month after their 16-year relationship with American Express came to an end, the company now anticipates to switch to Visa in late-June amid a host of logistical concerns. Citigroup Inc (NYSE:C) will serve as the exclusive issuer of the Costco-branded credit cards. American Express CEO Ken Chenault said the loss of the Costco partnership could impact approximately 10% of all credit cards from his company.
Shares in Costco inched up by 0.28 or 0.18% to 151.40 in after-hours.