STARBUCKS announced its first dividend yesterday joining companies like McDonald’s and Coca-Cola in making payouts to shareholders.
Starbucks set a quarterly dividend of 10 cents per share to be paid on 23 April to shareholders at the close of business on 7 April. The payout is part of a new plan to return 35 to 40 per cent of its net income to shareholders in the future.
Wall Street analysts had tipped the dividend to be six cents a share.
Separately, its board authorised a repurchase of up to 15m shares of its stock. This is in addition to 6.3m shares available for repurchase under previous authorisations the firm had made.
Chief financial officer Troy Alstead said in a statement: “We are confident in the overall financial strength of our business and the strong cash flow it continues to generate.”
The company for months has been evaluating the best use for its excess cash – estimated to be $1bn this year.
Alstead said in January that cash flow not earmarked for investment in the business “would be available to return to shareholders.”
The announcement came ahead of the coffee giant’s annual shareholder meeting where chief executive Howard Schultz unveiled the coffee giant’s latest growth strategy.
In 2009, Starbucks’ profit climbed 24 per cent after a review of the company’s operations across the globe.
Schultz has promised to revive growth at Starbucks. In the latest quarter, the chain posted a four per cent rise in US same-store sales – its first quarterly gain in sales at established domestic restaurants in two years.
City A.M. Reporter