What happened

Investors initially weren't happy with fiscal 2023 first-quarter results from Costco Wholesale (COST -0.44%). The big-box retailer reported earnings for the period ended Nov. 20 last night, and the initial reaction Friday morning was a 2.3% drop in shares.

But perhaps after evaluating the company's conference call with investors, the stock reversed course. As of 11:15 a.m. ET, Costco shares were trading higher by 1.5%. 

So what

The early slide came as the company reported net sales rising by 8.1% versus last year but said net income only grew 3% as expenses increased. Gross margin dropped year over year, but management noted a pretax charge of $93 million contributed to that drop. That charge was "primarily related to downsizing our charter shipping activities," according to Costco CFO Richard Galanti.

He also noted that without that charge, and not including gasoline inflation, gross margin for the quarter would have been very close to the prior-year period. But that isn't the only thing that may have turned investors more optimistic on the stock today.

Now what

In the company's conference call with investors, Galanti also indicated a special dividend was more likely than not on the way. Costco has paid four special dividends over the last nine years, including most recently a $10 per share payment in 2020. 

In answering a related question, Galanti noted the company does have enough cash on its balance sheet. Regarding payment of another special dividend, he stated, "I think that, too, is probably a question of 'when,' not 'if.'" 

The company raised its base dividend earlier this year by 14%, but its dividend yield is still just about 0.7%. Investors may not count on the special dividend, but it certainly can make an impact on the total return from owning Costco shares. That another is "probably" coming had investors back in there buying the stock today.