A large decline in the net loss in its Nook division helped net income increase 14% at Barnes & Noble in the third quarter ended January 31, 2015 over the comparable period in fiscal 2014. Net income rose to $72.1 million, while EBITDA also increased 14%, to $197.4 million. Total revenue fell 1.7%, to $1.97 billion.

The downsizing of its Nook division cut the loss in the unit to $29.3 million in the quarter from $61.8 million in last year’s third quarter. Revenue also fell significantly, declining about 50%, to $77.5 million. According to B&N, device and accessories sales fell 63%, to $37 million, while digital content sales dropped 29.3%, to $41 million. The sales decline was attributed to “lower device unit sales volume.”

The drop in sales in Nook devices was the one weak spot in B&N’s retail trade operation where revenue fell 1%, to $1.4 billion, and EBITDA fell by less than 1%, to $198.6 million. Lower sales of Nook products was the primary reason for the decline, B&N said, adding that excluding the sale of Nook products core comp store sales were up 1.7% in the quarter due to higher sales in both book and non-book categories. Including Nook sales, comp sales were down 0.3% in the quarter. B&N CEO Mike Huseby, credited “the continued stabilization of the physical book business,” as well as growth in non-book categories such as educational toys & games and gifts for offsetting lower Nook results. EBITDA in the division was flat at $199 million in the quarter, as the group benefitted from a higher mix of higher margin core products and lower core product markdowns, which was offset by the previously disclosed charge of $7 million relating to the termination of the Company’s pension plan.

As a result of the improving consumer book-buying trends, B&N said it will close only 13 stores in the year, down from the 20 outlets it had expected to shut. Huseby said the company has no interest in looking to cut costs at its retail trade stores in order to improve margins, but is focused on improving the retailer's top line. He said the company is committed to improving the customer experience at it stores. He also looked to diminish speculation that B&N would look to sell the Nook unit, saying the company has no plans at the moment to do anything more than offer customers print and digital books under the B&N name.

In the college group, which B&N plans to spin off into a standalone company, third quarter revenue rose 7%, $521 million. In addition to new store growth, third quarter sales benefitted from a later shift in the fiscal calendar which added an extra week of sales. Comparable college store sales decreased 1.4% for the quarter and EBITDA declined $7 million as compared to a year ago to $28 million, as revenue growth was offset by continued investments to support business growth and the digital education platform, B&N said.

“This performance across all businesses further supports our belief that now is the right time to separate the College business,” Huseby said in a statement. “The separation will allow each business to optimize their strategic opportunities, given their respective growth profiles, and specifically enable College to pursue opportunities in the growing educational services market.”

For the first nine months of fiscal 2015, total B&N revenue fell 3.4%, to $4.88 billion, but the company posted net income of $56.0 million compared to a net loss of $10.6 million in the first nine months of fiscal 2014. For the full fiscal year, B&N said it continues to expect retail comparable bookstore sales to decline in the low-single digits, while retail core comparable bookstore sales are expected to be approximately flat. Based on the better than expected comparable sales performance, the company now expects college comparable store sales to be approximately flat for the fiscal year. The retailer also expects full fiscal year EBITDA losses in the Nook segment to decline versus the prior year.