Barnes & Noble, the maker of the popular Nook e-Reader, has reported a net loss of $41 million in the quarter till July 28. The loss of $41 million is about 20 per cent lower than market expectations and 28 per cent lower than the net loss reported in the same quarter of the previous year. The company said that the sales at the company's brick-and-mortar stores recorded an increase 2 per cent during the quarter to $1.1 billion. Total revenue of the company increased 2.5 percent to $1.5 billion.

The company benefitted from the high sales of E-books meant for its Ebook reader device however, the sales of the Nook reader fell causing the digital revenue to remain flat during the quarter. The smaller net loss has allowed the company to post a small profit before including interest, taxes and depreciation and amortization. The small profit before deductions is a positive indication from the company that reported a loss in the same quarter in the previous year.

Barnes & Noble is aiming to secure an investment of $300 million by Microsoft in its Nook business, which will be developed as a separate company. Microsoft will control a stake of 17.6 per cent in the new company while Barnes & Noble will hold the remaining stake.