PetSmart Inc. said Monday that its board approved an 18 percent increase to its quarterly cash dividend and a new $525 million stock buyback program.

The Phoenix-based pet supply retailer said its dividend will increase by 2.5 cents to 16.5 cents starting in the second quarter. It will be paid on Aug. 10 to shareholders of record as of July 27.

PetSmart said the new stock buyback program, which will be in addition to any amounts left under its June 2011 authorization, will begin on July 30 and expire in January 2014.

PetSmart has more than 1,200 stores in North America.