Barnes & Noble reported lower-than-expected quarterly sales as its Nook e-reader business was hurt by discounts as it competes with Amazon.com's Kindle franchise.

The company did not give any forecast for the current fiscal year's financial results and its shares fell 7.2 per cent, or $1.10, to $14.17 in early trading.

Barnes & Noble has poured hundreds of millions of dollars into developing Nook, helped by well-reviewed devices including a glow-in-the-dark version, allowing it to garner some 27 per cent of the US e-books market in the 2.5 years since the reader was launched.

But that compares with Amazon's 60 per cent, and in January, the retailer acknowledged slower-than-expected sales of devices like the black and white Nook Simple Touch.

The company's sales were hurt by returns of the device from retailers during the fourth quarter, which is typically the slowest sales quarter for Barnes & Noble.

Revenue for the quarter was $1.38 billion, up slightly from a year earlier.

Barnes & Noble said in April that Microsoft would invest $300 million and get a 17.6 per cent stake in a new subsidiary made up of the Nook digital business and its college bookstore chain.

Revenue at its Nook business, including e-books, fell 19 per cent to $164 million during the fourth quarter, which ended April 28th, as the company took returns of the Simple Touch reader.

Same-store sales at its 700 superstores rose 4.5 per cent compared with the year-earlier quarter.

Barnes & Noble reported a net loss of $57.7 million, or $1.08 per share, for the quarter, compared with $59.4 million, or $1.04 per share, a year ago.

Reuters