Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of bookstore operator Barnes & Noble (NYSE:BKS) sank 16% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has soared in 2013 on optimism over its digital device business, but today's fourth-quarter results -- losses more than doubled to $118.6 million on a 7% revenue decline -- is forcing Mr. Market to sober up. In fact, to reduce upfront risk, management said that it will partner up with an unidentified third party to make its tablets, triggering concerns that the Nook's upside sales potential will now be limited, as well.    

Now what: For 2014, management sees a same-store retail sales decline in the high-single digits, and expects a single-digit drop at its college stores. "We are taking big steps to reduce the losses in the NOOK segment, as we move to a partner-centric model in tablets and reduce overhead costs," said CEO William Lynch. "[T]he underpinning of our strategy remains the same today as it has since we first entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device." When you couple Barnes & Noble's sluggish retail sales with all the uncertainty surrounding its digital business, however, I wouldn't be so quick to buy into that turnaround optimism.

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Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.