Supermarket chain Costco declares special dividend of $10 per share

FILE PHOTO: Corporate logos are seen on the rear of a Costco membership card/American Express credit card in this photo illustration taken in Toronto, Ontario February 12, 2015. REUTERS/Hyungwon Kang

(Reuters) - Membership-only supermarket chain Costco Wholesale Corp COST.O on Monday declared a special dividend of $10 per share as it benefits from consumers stocking up essentials due to the COVID-19 pandemic, sending its shares up about 2% after the bell.

The dividend totaling $4.4 billion would be funded through existing cash. It will be paid on Dec. 11 and is the company’s fourth such payout in eight years.

Higher demand for fresh produce, appliances and gardening and sporting goods has helped the warehouse chain record growing sales and traffic at its stores, where customers typically buy items in bulk at lower prices.

Separately, Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has dissolved its stake in Costco and started new investments in drugmakers including Pfizer PFE.N and Merck MRK.N.

Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur