The company said it expects sales at existing bookstores to drop by low to mid-single digits in the current fiscal year as the boost it got from customers shifting over from the now defunct Borders chain ebbs.
Barnes & Noble's fourth-quarter loss was also bigger than analysts expected and its shares fell 3.7 percent to $14.67 Tuesday on the New York Stock Exchange.
The company has poured hundreds of millions of dollars into the development of Nook, including a glow-in-the-dark model, whose positive reviews allowed it to garner some 27 percent of the U.S. e-books market in the 2-1/2 years since the reader was launched.
But that compares with 60 percent for Amazon, and in January, the retailer acknowledged slower-than-expected sales of devices such as the black-and-white Nook Simple Touch.
As the black and white e-reader market matures, the battleground is shifting more to color e-readers and tablets that offer more media, and not just text.
"That's where Barnes & Noble has an uphill battle," Morningstar analyst Peter Wahlstrom said. "Amazon has a distinct lead in that area."
Barnes & Noble is counting on a deal with Microsoft Corp and reduced development expenses for Nook to ease losses for the digital business this fiscal year.
The deal, in which Microsoft will invest $300 million and get a 17.6 percent stake in a new subsidiary consisting of the Nook digital business and its College bookstore chain, is expected to close later this year.
Barnes & Noble also plans to have Nook devices and digital book stores in some international markets for the holiday season.
Barnes & Noble sales in the fourth-quarter ended April 28 were hurt by returns of the device from retailers during the fourth quarter, typically the slowest in sales for Barnes & Noble.
Revenue for the quarter was $1.38 billion, up slightly from a year earlier, but below the average analyst estimate of $1.48 billion, according to Thomson Reuters I/B/E/S.
The company posted 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.
Excluding one-time items, the loss was 98 cents a share, compared with the average analyst estimate of a loss of 93 cents, according to Thomson Reuters I/B/E/S.
Revenue at its Nook business, including e-books, fell 19 percent to $164 million during the fourth quarter, as the company took returns of the Simple Touch reader.
Same-store sales at its 700 super stores rose 4.5 percent compared with the year-earlier quarter. But some of that increase was due to more of a boost than the company expected from Borders going out of business.