The bookseller offered a closer look at its Nook unit in the report, breaking out the results for device and digital content sales separately for the first time. In April, B&N announced that it was spinning its digital and college businesses into a new subsidiary with $300 million in backing from Microsoft, called Newco.
It was not a good quarter for Nook. Revenues declined by more than 10% to $164 million, burdened mainly by the devices themselves, which sold badly, were sold at a lower margin to compete with Amazon's Kindle lineup and were returned in high numbers after the holidays. Holiday sales of the $139 Nook Simple Touch E-Ink reader in particular were so poor that the company was forced to buy back inventory. Sales of digital content were up by 65%, however.
Retail sales, which now includes BN.com as well as bookstores, were up 0.5% to $1.1 billion for the quarter. Barnes & Nobles's brick-and-mortar stores actually performed better than BN.com, which witnessed a decline in sales of physical goods for the quarter and for the fiscal year. Comparable bookstore sales increased 4.5% for the quarter, thanks to Borders's liquidation and breakout sales of The Hunger Games and Fifty Shades of Grey trilogies, the company said.