The company delivered the news to investors overnight, saying that the loss in the Nook segment will be greater for its current fiscal year (ending in April) than the $262 million loss recorded by the Nook business a year ago.
Overall sales in the Nook unit are expected to be less than $3 billion, the company says.
Barnes & Noble shares are down more than 6 percent so far in trading today.
The news also has implications for Microsoft, which last year joined Barnes & Noble as an investor in the Nook division. Apart from a Nook application for Windows 8, the partnership between the two companies hasn’t yet resulted in any new products or devices.
Amazon doesn’t disclose Kindle sales but said in its recent earnings release that its eBooks category was up about 70 percent last year, becoming a multi-billion dollar business for the company and growing much faster than traditional book sales.
Barnes & Noble offers Nook e-readers and tablets and sells digital books for the Nook platform, part of its effort to expand beyond its traditional bookstores.