Barnes & Noble's traditional business model is lagging, but its digital focus has helped buoy its financial performance, the company said today.
During its fiscal first quarter that ended July 30, B&N generated $1.4 billion in sales, representing a 2 percent increase over the same period last year. Its slight revenue increase becomes more impressive when one considers that the core of its operation--book sales in stores--were down during the period. In fact, the company reported that store sales decreased 3 percent year over year to $1 billion.
However, the company's Nook operation, led by its Nook Color, changed everything for Barnes & Noble. The company reported that its Nook business, which includes hardware and digital-content sales, grew 140 percent during the period to $277 million.
The Nook and Nook Color have quickly gained the respect of consumers worldwide. The Nook Color, which costs $249,and offers an application store, in addition to e-book support. The Nook is an e-reader that costs $139.
That pricing, combined with device features, have helped the Nook gain high marks among critics and consumers, alike. In fact, earlier this year, CNET dubbed the Nook "." The Nook Color earned "best sub-$250 color e-reader."
However, Barnes & Noble's hardware still finds itself facing off with juggernauts in the e-reading/tablet space. Several tablets, including Apple's iPad, allow people to read e-books in addition to download apps, surf the Web, and check e-mail. The iPad 2, for example, earned CNET's title of "best full-featured reading tablet."
What's more, Barnes & Noble is competing head-on with Amazon's Kindle e-reader. Amazon hasn't shared how many units of the device it has sold, but the company has said that the Kindle is its. Earlier this year, . Late last year, Amazon said that it .
Looking ahead, Barnes & Noble expects continued success for its Nook operation. The company said today that it plans to double sales in that division during this fiscal year, earning $1.8 billion, compared with $880 million last year. The book retailer also expects to see strong sales on its Web site with comparable sales increasing 60 percent to 70 percent year over year.