Sales fell and losses increased at Barnes Noble in the second quarter ended October 28, compared to the second quarter a year ago. Total revenue dropped 7.9% in the period, to $791.1 million, while the loss deepened to $40.1 million (up from $20.4 million in the second quarter of fiscal 2017). Both the sales decline and drop in revenue were higher than analysts had expected.

Part of the sales decline was due to a 6.3% drop in comparable store sales. BN blamed half of that decline on the strong sales of Harry Potter and the Cursed Child last summer. The rest of the sales drop, the chain said, was due to lower sales in non-book categories, wehre comps were off 6.9%. Excluding Potter and coloring book, book comps were about flat in the quarter.

CEO Demos Parneros pointed to a strengthening of book sales in the quarter, and the fact that same store sales trends continued to improve into November . Parneros said the company will maintain its emphasis on books at its stores while “narrowing our our non-book assortment.” During the quarter, BN “aggressively” cleared out inventory that wasn’t selling, primarily in the gift and toys and games areas, Parneros said.

Sales in BN’s retail trade group fell 7.2% in the quarter, to $770 million, while revenue in the Nook division dropped 26% compared to last year’s second quarter, to $26 million.

Parneros said he expects comp store sales to be flat for the final six months of the fiscal year, and to finish down in the low single digits. With plans to cut costs by $40 million for the full year, Parneros said BN still expects to generate EBITDA of about $180 million for the full fiscal year.

During the conference call with analysts, Parneros said the company’s plan is to open smaller stores that will emphasize books. He also reiterated that in fiscal 2019 BN expects to become “net positive” in stores–in other words, opening more stores than it closes.

Responding to the last question, Parneros said there is “not much more to say” about the Sandell Asset Management proposal to take BN private. BN had rejected the proposal as “not a bona fide offer.”

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