Barnes & Noble Q1 loss narrows to $40M as Nook sales decline

The company blames production issues and unmet demand for its recently launched Glowlight version.

The Nexus 7 flanked by its chief competitors, the Amazon Kindle Fire and Barnes & Noble Nook Tablet.
The Nook (right) faces competition from the Nexus 7 (center) and Kindle Fire. Sarah Tew/CNET

Barnes & Noble narrowed its fiscal first-quarter loss, but suffered through a few hiccups with its Nook e-reader business.

The book retailer posted a loss of $40.9 million, or 78 cents a share, compared with a loss of $56.6 million, or 99 cents a share, from a year ago. Revenue rose only slightly to $1.45 billion from $1.42 billion a year ago.

Analysts, on average, estimated that the company would post a loss of 98 cents on revenue of $1.48 billion, according to Thomson Reuters.

The company's Nook unit, which includes the e-reader and digital books, saw revenue rise by only $1 million to $192 million. The unit saw a 46 percent increase in digital sales from a year ago. Sales of actual e-readers declined as a result of lower average selling prices and an issue with the production of its new Nook readers with Glowlight. The company said there remains unmet demand for the reader.

The Nook business represents Barnes & Noble's foothold in the digital world. Even as the traditional brick-and-mortar store business declines, it has the opportunity to offset that business with its e-reader. But Barnes & Noble's e-reader and tablet positions face increasing competition from Amazon's Kindle Fire, Google's Nexus 7, and the purported iPad Mini said to be coming from Apple.

The unit's loss before interest, taxes, depreciation, and amortization, also known as Ebitda, was $57 million, wider than the loss of $51 million it posted a year ago. The company attributes the loss to continued investment in the development of its Nook products.

On the retail end, which remains the biggest part of its business by far, Barnes & Noble posted revenue of $1.12 billion, a 2 percent increase from a year ago. The retailer has benefited from the shutdown of rival Borders. It also attributed its success to the popularity of the "Fifty Shades of Grey" series.

 

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