Best Buy boosts investor dividend as quarterly profit jumps
Best Buy Co. raised its quarterly dividend 21 percent and plans to give shareholders an additional one-time payment after the nation's largest electronics chain reported a better-than-expected fourth-quarter profit.
The Twin Cities-based retailer released quarterly earnings Tuesday and said it will raise its cash dividend to 23 cents per share from 19 cents, and it will pay shareholders a one-time dividend of 51 cents per share culled from the proceeds of some legal settlements over the price of liquid crystal displays, or LCDs, sold in the United States.
The settlements stem from litigation against technology makers over claims that they conspired to fix LCD prices. LCD technology is used in items like flat-panel TVs, computers and phones.
Best Buy will pay the special cash dividend and the increased regular quarterly payout on April 14 to shareholders of record at the close of business on March 24.
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Under CEO Hubert Joly, who took the helm in 2012, has been cutting costs and revamping stores to improve results as it faces competition from online retailers and discount stores. It's been also rolling out services like shipping goods from all its stores, which means speedier deliveries.
It's been working with big suppliers like Samsung to develop home theater areas for shoppers to check out. It's also increased its online sales to 9.8 percent its total from 7 percent two years ago. The moves have helped improve profit margins and drive sales.
Best Buy is planning a number of initiatives for the current year. It aims to focus on improving merchandise and just launched a wedding registry on its website.
But the company is still facing falling prices for popular items like TVs and weaker demand for products like tablets and computers.
In fact, it reiterated that it expects flat to declines of low single digits in revenue in stores open at least a year for the current quarter and second fiscal quarter.
Best Buy's share price was up about 1 percent in early afternoon trading after rising as much as 3 percent following the earnings announcement.