May 21 (Bloomberg) -- Barnes & Noble Inc., the largest U.S. bookstore chain, reported a smaller first-quarter loss than analysts estimated and boosted its full-year forecast.

The loss from continuing operations was 4 cents a share, the New York-based company said today in a Business Wire statement. Seven analysts surveyed by Bloomberg estimated a loss of 15 cents, on average.

Sales in stores open at least 15 months fell 5.7 percent. David Schick, an analyst at Stifel Nicolaus & Co. in Baltimore, estimated a drop of 7 percent. As the U.S. recession entered its second year, Barnes & Noble addressed declines in sales and store traffic by improving the efficiency of its distribution system and scaling back discounts.

Barnes & Noble boosted its full-year profit projection to $1.10 to $1.40 a share from a previous range of 95 cents to $1.25. Second-quarter profit will total as much as 15 cents a share, the company forecast.

The net loss in the first quarter widened to $2.69 million, or 5 cents a share, compared with a loss of $2.22 million, or 4 cents, a year earlier. Sales fell 4.4 percent to $1.11 billion. Six analysts estimated that figure at $1.08 billion, on average.

Barnes & Noble climbed 71 cents, or 3 percent, to $24.60 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 64 percent this year.

To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

Last Updated: May 21, 2009 16:18 EDT