PITTSBURGH (AP) -- American Eagle Outfitters is moving up the payment of its first-quarter dividend, a step many companies are taking ahead of potential tax increases in 2013.
The clothing retailer said Tuesday its quarterly dividend will remain at 11 cents for the 2012 fourth quarter and the 2013 first quarter. The combined dividend, totaling 22 cents, will be paid on Dec. 28 to shareholders of record on Dec. 19.
Tax rates on dividends and other investment income are among the key issues at play in negotiations between the White House and Republican congressional leaders. Rates are slated to shoot higher in January if no deal on the so-called fiscal cliff is reached in Washington.
That's prompted many companies to review their policies on payouts for shareholders, setting special one-time payments in December or moving up payments originally slated for 2013 to this year.
Pittsburgh-based American Eagle Outfitters Inc. said it would normally pay its first-quarter dividend in April.
Since 2003, investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
On Wednesday, American Eagle reported better-than-expected fiscal third-quarter results and released a strong outlook for the current quarter and full year. The company's stock shed 2 cents to $21.28 in morning trading.
