While brick-and-mortar store sales continued to fall, higher online sales and its digital Nook reader enabled Barnes & Noble to cut its latest quarterly losses to $56.6 million (99 cents per share) from $62.5 million ($1.12) a year ago.

The nation’s No. 1 bookseller, with 704 stores in 50 states including one in Valencia, plus 635 college bookstores, made the announcement before trading commenced Tuesday. The market reacted favorably, driving stock prices nearly 10 percent higher by mid-day to $12.49.

Sales of Nook readers, content and accessories improved by 140 percent on the year to $277 million for the three months ending July 30. Total online sales through BN.com rose 37 percent to $198 million.

That was sufficient to push company-wide sales 2 percent higher for the year to $1.4 billion, because in-store sales fell by 3 percent to $1 billion and college bookstore sales fell by 2 percent to $220 million.

Barnes & Noble in-store sales were expected to be negatively impacted by bankrupt rival Borders, which slashed prices to eliminate inventory during the quarter as it shuttered stores.

Barnes & Noble chief executive William Lynch said the digital readers are a big ticket to his company’s future.

“The company is encouraged by the progress achieved against our strategy and believes in our plan to continue to appropriately invest in the massive digital opportunity,” he said.