Duty Free International, tired of seeing its stock ground into the dust along Wall Street, announced today that it will buy back 1 million shares of its common stock and for the first time pay a dividend.
The Ridgefield, Conn.-based company, which has major operations in Glen Burnie, has seen its stock plunge from a high of $56.25 in January to a low of $19.75 yesterday, largely because cold weather has slowed sales at its Canadian border stores.
Trading was delayed more than an hour this morning after Duty Free's announcement. At 11 a.m., the stock was trading for $21.875, up $1.125 from yesterday's close.
David Bernstein, chairman of the company, said the buyback is "management's way of letting the shareholder know we have confidence in the future of the company."
Mr. Bernstein said whether to pay a dividend has been a subject of internal debate for some time. He said Duty Free is in good shape to begin the payout, with nearly $90 million in cash in the company's coffers.
The 5-cent quarterly dividend, payable Aug. 15 to shareholders of record as of July 31, should make the company's stock more attractive to institutional holders, he said. Some institutions restrict their stock purchases to dividend-paying companies.
Duty Free's confidence-building measures come after a spring and early summer that saw the company fall from its perch as one of the fastest-growing stocks of 1991.
"This has been a miserable year for us weatherwise," said Mr. Bernstein, referring to the cold, wet conditions that have dampened Canadians' urge to travel and have limited traffic through Duty Free's border stores.