Barnes & Noble posted a first-quarter loss on legal expenses related to its proxy fight with billionaire financier Ron Burkle, and its results missed expectations. But the struggling book seller reported it was making inroads with its online bookstore and e-book reader, the Nook.
The largest U.S. traditional book seller said it lost $62.5 million, or $1.12 a share, in the quarter ending July 31. Last year during the same period it earned $12.3 million, or 21 cents a share.
Revenue rose 21 percent to $1.4 billion, although the cost of sales rose as the company invested more in its online bookstore and Nook e-reader.
Analysts expected a loss of 80 cents on revenue of $1.4 billion, according to Thomson Reuters.
The company, based in New York, said it has now has a larger share of the digital book market than its 17 percent share of physical books. Barnes & Noble said one-quarter of Nook customers are new to Barnes & Noble's website, and people with Nooks have increased their spending by about 20 percent.
The company plans to spend $140 million this year to boost its digital presence and market its Nook.
Executives declined to speak about the proxy fight with Burkle, who wants to increase his stake in the company.
The company has been fighting Burkle and his Yucaipa Cos. investment firm, which has about a 19 percent stake in the company. Burkle unsuccessfully sued Barnes & Noble in a bid to expand his stake even more without triggering a shareholder rights plan. Such plans, commonly called a "poison pill," are designed to prevent hostile takeovers. When that lawsuit was dismissed, Burkle said he would nominate a slate of three directors to the company's board. The annual shareholder meeting is Sept. 28.
Barnes & Noble said its pretax legal expenses in the quarter were $9.5 million, or 11 cents a share.