ATLANTA (Reuters) - U.S. bookseller Barnes & Noble Inc (BKS.N: Quote, Profile, Research) reported a lower quarterly profit Thursday as a deteriorating economy hurt sales, while chief rival Borders Group Inc (BGP.N: Quote, Profile, Research) said it might put itself up for sale.

Barnes & Noble, the world's largest specialty book retailer, boosted its quarterly dividend and said it expects same-store sales in the current quarter to fall slightly. Its shares rose nearly 9 percent, while Borders shares fell more almost 40 percent.

Booksellers, like many other retailers, face challenging times as rising gasoline and food prices take a bigger bite out of consumers' paychecks.

Borders suspended its quarterly dividend in a bid to conserve cash and said it was reviewing its options, including the sale of some or all of its businesses.

Mitchell Klipper, Barnes & Noble's chief operating officer, said, "We haven't been approached by Borders' investment bankers, and if we are, we'll certainly take a good look at the company and put it under review."

Barnes & Noble reported net income of $115 million, or $1.79 a share, for the fiscal fourth quarter ended Feb. 2, down 9 percent from $126.7 million, or $1.83 a share, a year earlier.

Excluding benefits from property insurance and litigation settlements, earnings were $1.69 a share, a penny below analysts' average forecast, according to Reuters Estimates.

Consolidated sales fell 2 percent to $1.85 billion. The year-earlier period included an extra week.

Sales at stores open at least a year fell 0.5 percent, hurt by weaker music sales, the company said.