NEW YORK (AP) -- Barnes & Noble's fiscal first quarter was a tale of modern and traditional. Tech-savvy readers snapped up its e-books and other digital content during the period, while traditionalists headed to its bookstores for the popular "Fifty Shades of Grey" series and other items.
The double dose of good news, coupled with cost-control efforts and lower expenses, helped the New York company's loss narrow while its revenue rose.
Weak sales of its Nook e-readers and an unchanged full-year outlook may have given investors pause. They sent its shares down more than 3 percent in morning trading.
Barnes & Noble Inc., the largest traditional U.S. bookseller, faces tough competition from online retailers like Amazon.com and discount stores as consumers increasingly move away from traditional books in favor of electronic books. These factors have pushed the chain to invest heavily in its Nook e-reader and e-books, with digital content playing a key role in its success last quarter.
Barnes & Noble also had the added bonus of riding the buzz of "Fifty Shades of Grey" by E.L. James, the publishing phenomenon that has drawn legions of readers into bookstores. The erotic novels occupy the top three spots on The New York Times' list of best-selling print and e-book fiction.
Executives at Barnes & Noble speaking during a conference call on Tuesday said that the company's bookstores also benefited from sales of games, educational toys and other children's products. Management said the disappearance of competitor Borders' bookstores also provided a lift, and traffic improved in its stores for the first time in years.
For the period ended July 28, Barnes & Noble lost $45.2 million, or 78 cents per share. That was less than the $56.6 million, or 99 cents per share, that it lost a year earlier. Barnes & Noble hasn't made a profit in a non-holiday quarter in three years.
The chain reduced its selling and administrative expenses in the quarter as well as its interest expense.
Revenue climbed 2 percent to $1.45 billion from $1.42 billion.
Revenue for the retail division — which includes bookstores and its website businesses — rose 2 percent. Revenue from bookstores open at least a year, a key gauge of the chain's health, increased 4.6 percent. This performance was buoyed by the "Fifty Shades" sales as well as the Borders liquidation.
CEO William Lynch said the results were also helped by mass merchants and other brick-and-mortar booksellers reducing the variety of books they carry as well as cutting shelf space for books.
Removing the sale of Nook products, revenue at bookstores open at least a year increased 7.6 percent.
Barnes & Noble has 689 bookstores in 50 states.
Revenue for its college bookstores open at least a year fell 2 percent, as the May-through-July period is when most students have off from classes and does not include the important back-to-school buying period.
The Nook unit — which includes e-readers, digital content and accessories — reported basically flat revenue at $192 million. Sales of digital content surged 46 percent. This content includes digital books, digital newsstand and the apps business.
Revenue from devices dropped partly because of lower prices. Chief Financial Officer Michael Huseby said Nook prices were about 23 percent lower than a year ago.
Earlier this month Barnes & Noble announced that it was cutting the price for its less-expensive model Nook tablet computer by $20, undercutting Amazon's Kindle Fire. The New York company said it was lowering the price for the 8-gigabyte model Nook tablet to $179 from the current $199. The Kindle Fire, with 6 gigabytes of memory, sells for $199. Barnes & Noble also announced a $50 reduction, to $199 from $249, for its 16-gigabyte Nook tablet.
Device sales were also hurt by Barnes & Noble's inability to get enough of its e-readers with the Glowlight feature to market to meet demand. The Glowlight emits low-level light to help with bedtime reading.
"Device unit growth and digital content growth would have been materially higher, if not for the production shortages," Lynch said.
Barnes & Noble also maintained its prediction for a mid-single-digit decline in fiscal 2013 revenue at bookstores open at least a year. Revenue from college bookstores open at least a year is still expected to be flat.
Shares of Barnes & Noble fell 45 cents, or 3.6 percent, to $11.90 in morning trading. For the year to date, the shares are off 16 percent and far below their 52-week high of $26.