Barnes & Noble, the world's largest book retailer, posted a first-quarter loss, citing charges stemming from the closure of its Internet distribution center and an investigation of its stock option granting practices.
The retailer said the net loss totaled $1.7 million, or 3 cents a share, compared with a year-earlier profit of about $10 million, or 14 cents a share.
Excluding the charges, the bookseller said it earned $6.8 million, or 10 cents a share for the quarter.
Quarterly sales rose 3% to $1.1 billion, boosted by best-selling titles such as Rhonda Byrne's "The Secret," Chris Bohjalian's "The Double Bind," and Mohsin Hamid's "The Reluctant Fundamentalist."
Comparable store sales at its bookstores rose 1.7%, while Internet comparable sales climbed 8%.
Analysts, on average, were expecting Barnes & Noble to earn 1 cent a share for the quarter, excluding items, on about $1.1 billion in sales, according to Reuters Estimates. Shares of the company gained ground Thursday.
Last month, the company said it found numerous instances of improperly dated stock option grants and said it would need to make an adjustment decreasing its retained earnings by $22.8 million.
"As expected, our gross margin declined due to greater discounts given to members and from greater usage as the size of our member base continues to grow," Chief Executive Steve Riggio said in a statement.
Members of Barnes & Noble's loyalty program get a 40% discount off list prices of hardcover fiction and nonfiction best-sellers.
For the second-quarter, the company said it expects a low to mid-single digit rise in comparable store sales, with a boost in volume from the July 21 release of "Harry Potter and the Deathly Hallows."
The company also expects second-quarter earnings to range between 8 and 12 cents a share, with full-year earnings ranging between $1.49 and $1.67 a share.
Analysts, on average, expect second-quarter earnings of 13 cents a share and full-year earnings of $1.73 a share, according to Reuters Estimates.