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Best Buy boosts dividend ahead of shareholder meeting

June 10, 2014, 12:50 PM UTC
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NEW YORK, NY - AUGUST 21: People walk by a Best Buy store on August 21, 2012 in New York City. Following fresh reports of weak sales results, the electronics retailer's stock opened down about 10 percent on Tuesday. Best Buy announced on Monday that it has named Hubert Joly to be its new chief executive. (Photo by Spencer Platt/Getty Images)
Photograph by Spencer Platt — Getty Images

Best Buy (BBY), which is facing a number of challenges in the electronics segment this year, on Tuesday gave investors a reason to cheer as the electronics retailer raised its quarterly dividend for the first time in two years.

The company approved a 12% increase to the company’s dividend, increasing the payout to 19 cents a share. The increase, according to President and Chief Executive Hubert Joly, is “indicative of our improved cash position.”

The dividend news was disclosed ahead of Best Buy’s shareholder meeting, which is to be held at the company’s corporate campus in Minnesota later on Tuesday.

Best Buy investors haven’t had a lot to celebrate this year. The company’s shares are down about 27% so far in 2014, missing out on the broader market’s increase. The retailer in May reported a steeper-than-expected drop in fiscal first-quarter sales. At the time, Best Buy indicated it projected industry-wide declines for many electronic categories it competes in during the second and third quarters of this year. Ongoing softness in the mobile category was partly to blame, as consumers await highly anticipated new products.

Best Buy has faced a tough challenge from online retailers like  (AMZN), which can provide customers greater clarity about where to get the best deals for the latest gadgets. Best Buy has sought to compete by improving the competitiveness of its prices.