Barnes & Noble Posts $2.7M 1Q Loss As Sales Drop

Frost & Sullivan analyst Aravindh Vanchesan said the company seems to recognize the changing nature of its consumer in that it is updating its online business and putting emphasizing e-books to better compete with companies like Amazon.

But he said the company will face tight margins for some time because consumer spending is unlikely to improve soon. Rather than invest in attempts to meet the scale and efficiency of Amazon, Vanchesan said, Barnes & Noble might do best to maintain low losses and hang on to its existing customer base.

"They just have to ride this period out," he said.

Barnes & Noble said the first quarter was good enough that it is raising its full-year profit estimate to a range of $1.10 to $1.40 a share, from 95 cents to $1.25 per share. Analysts expect a full-year profit of $1.07 per share.

The company also said it expects comparable-store sales to decline 3 percent to 5 percent for the year, better than the previous forecast of a 4 percent to 6 percent annual drop.