February 8, 2012 / 9:38 PM / in 6 years

Indigo Books profit falls on lower margins

TORONTO (Reuters) - Indigo Books & Music Inc (IDG.TO) reported lower quarterly earnings on Wednesday as discounts on print books and higher sales of low-margin e-readers pushed down gross profit margin even as revenue rose slightly.

The company said the lower margins had not yet been offset by an expected gain in the sales of gifts and toys, which the company is putting more emphasis on.

For the company’s third quarter, ended December 31, net earnings fell to C$14.4 million ($14.4 million), or 56 Canadian cents a share, from C$20.8 million, or 82 Canadian cents, the year earlier.

Revenue at Canada’s biggest book retailer rose 0.5 percent to C$352.9 million.

Same store sales, a key measure for retailers, at large-format Indigo and Chapters stores rose 1.8 percent. Online sales rose 9.3 percent.

Reporting By Allison Martell; Editing by Peter Galloway

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