Dividends are not set in stone. A company can lower or raise
its payouts at its discretion.
On the bright side, they can also announce special
distributions, as retailersAmerican Eagle Outfitters (
) andDSW (
) did last week.
American Eagle unveiled a special dividend of $1.50 a share,
marking its second bonus payout in less than two years.
"The special cash dividend is a component of our capital
allocation plan, which balances continued investment in our
business with top tier shareholder returns," said CEO Robert
Hanson in a press release.
American Eagle will pay the special dividend along with its
regular quarterly dividend of 11 cents a share on Oct. 10 to
shareholders of record Sept. 26.
Generally, American Eagle pays 44 cents a share, giving it an
annualized yield of about 1.9%. Its yield is about the middle of
the road of its dividend-paying peers. But the additional $1.50 a
share jacks up its yield to around 8.3%, albeit temporarily.
Last month, the apparel and accessories retailer posted a 62%
jump in Q2 earnings and raised its full-year profit outlook.
Shoe retailer DSW unveiled its second special dividend in just
over a year. The company's board approved an additional payout of
$2 a share, which will be paid Oct. 26 to shareholders of record
The bonus payment is on top of its regular quarterly dividend
of 18 cents a share. DSW's quarterly dividend will be paid Sept.
28 to holders of record Sept. 18. The company started paying
dividends about a year ago.
Without the bonus payout, DSW has an annualized yield of about
1.1%. But including the special dividend, DSW's yield rises to
DSW also recently announced that James O'Donnell, former chief
executive of American Eagle, has been appointed to its board.
Retail stocks have been strong performers lately. The S&P
Retail index hit an all-time high last week.
In Monday's IBD, the retail apparel industry group -- home to
American Eagle and DSW -- moved up to No. 10.
That's an improvement from three weeks ago, when it ranked No.