Best Buy said Tuesday that it would buy back shares for the first time since 2012 following the company’s strong showing in its fourth quarter.
 
The board of directors for the Richfield-based electronic retailer approved the $1 billion buyback to be phased over three years.
 
Mobile phones and large screen televisions helped boost the company’s bottom line, more than making up for declining tablet sales. Earnings jumped 77 percent to $519 million, or $1.46 per share, for the quarter ending Dec. 31, compared to $293 million (83 cents per share) during the same time last year. Revenue saw a boost too: up 1.3 percent to $14.2 billion for the quarter. Analysts polled by Thomson Reuters expected earnings of $1.35 per share and $14.35 billion in revenue.
 
Comparable sales rose for the second-consecutive quarter, the first time in five years, according to the Star Tribune.
 
Best Buy has been aggressive in slashing costs, with its “Renew Blue” program producing annualized savings of more than $1 billion. While announcing earnings, the company said it planned a second phase of cuts expected to save more than $400 million annually, mostly achieved through system investments.
 

Despite the positive news, executives warned of flat or declining sales during the first half of the year with fewer breakaway product releases and increased competition. The bottom line will also take an initial hit for the investments in stores and behind-the-scenes efficiencies.
 
“To win against this backdrop, investing now is imperative,” CEO Hubert Joly said in a statement. “While these investments will put pressure on our fiscal 2016 operating income rate, we believe they leverage our executional momentum and will allow us to build a differentiated customer experience and a foundation for long-term success.”
 
The company has struggled for years to head off competition from the likes of Amazon and general merchandise retailers like Target and Walmart. It has recently rolled out ship-from-store and an electronics wedding registry for tech-savvy millennials to help capture market share back.
 
In addition to announcing results, Best Buy said it was boosting its quarterly dividend 21 percent to 23 cents per share and that it would pay a special, one-time dividend of 51 cents per share related to proceeds from a settlement.
 
Shares of the company remained largely flat by midday trading at $38.94.