October 26, 2009 / 9:28 PM / 9 years ago

UPDATE 1-Indigo profit drops on digital service investment

* EPS C$0.09 vs C$0.13 a year earlier

* Revenue C$207 million

* Superstore comparable store sales down 0.9 pct

* Online sales down 5.2 pct

TORONTO, Oct 26 (Reuters) - Indigo Books & Music (IDG.TO), Canada’s biggest book retailer, posted a drop in quarterly profit on Monday as it dealt with a tough economy and continued to invest in its mobile-phone download business.

Indigo said it earned C$2.2 million ($2.1 million), or 9 Canadian cents a share, in the period ended Sept. 26. That was down from a profit of C$3.2 million, or 13 Canadian cents a share, in the same quarter a year earlier.

The company’s revenue rose to C$207 million from C$205.3 million a year earlier as it opened four new superstores in the quarter.

However, on a comparable store basis, Indigo’s superstores saw a 0.9 percent sales decline and the company’s small-format stores were down 2.1 percent. Online sales fell 5.2 percent.

Indigo said the drop in its bottom line was due to increased investment in Shortcovers, the digital download service it launched in February.

“We are satisfied with our results through what has proven to be a very turbulent time for most retailers,” Chief Executive Heather Reisman said in a statement.

The company released its results after markets closed. Its shares rose 10 Canadian cents to close at C$12.90 on the Toronto Stock Exchange on Monday.

$1=$1.07 Canadian Reporting by Wojtek Dabrowski; editing by Peter Galloway

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