One of the largest dividend increases in Walmart’s history helped shareholders look past, temporarily at least, yesterday’s release of sales results that show a disturbing trend at U.S. stores.
Word of soft sales at the start of the first quarter leaked out of Walmart last week and then on Thursday the company announced a 1% increase in fourth quarter U.S. same store sales at the low end of a forecast range of 1% to 3% and indicated first quarter comps would be flat. Rather than sparking a sell off – that happened after last week’s leak – shares surged as much as $2 as investors cheered an 18% increase in the dividend that pushed the annual payout up 29 cents to $1.88 a share.
Aside from the size, what was unusual about the dividend hike was the timing of the announcement. Walmart typically announces adjustments to its dividend in March, not in conjunction with the release of fourth quarter results.
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