The market may be pushing higher today, but the same cannot be said for the Myer Holdings Ltd (ASX: MYR) share price.
In morning trade, the department store operator's shares are down 10% to 90 cents.
Why is the Myer share price sinking?
The good news for shareholders is that the weakness in the Myer share price has nothing to do with its sales performance. Nor has a broker become suddenly very bearish on the company.
Rather, this weakness has been driven by Myer's shares going ex-dividend for its interim dividend.
When a share trades ex-dividend, it means the rights to an upcoming dividend are now settled and new buyers will not receive it. As a result, a share price tends to drop in line with the value of the dividend to reflect this.
The Myer dividend
Earlier this month, Myer released its half-year results and reported a 24.2% increase in sales to $1,884.9 million and the doubling of its net profit after tax to $65 million. This reflects strong in-store sales growth, which offset a pullback in online sales.
This strong profit growth allowed the Myer board to declare total dividends of 8 cents per share. This comprises a fully franked interim dividend of 4 cents per share and a special fully franked 4 cents per share dividend.
This morning, its shares have gone ex-dividend for both these dividends. Which means that eligible shareholders can now look forward to receiving these dividends in their nominated bank accounts on 11 May.
Another positive is that the Myer share price remains up 80% over the last 12 months despite today's pullback. This can be seen on the chart below.
