I feel a little sorry for bricks-and-mortar booksellers. People come in, thumb through the books, and then go home and order them on Amazon.com (NASDAQ:AMZN). Sure, a few of us will actually buy something at Borders (NYSE:BGP) once in a while, but in this Fool's case, it's usually a buy motivated by pity or guilt, and that's not a firm foundation for growth.

It appears that I'm not the only one not buying a lot of books at Borders these days. Companywide sales rose less than 1% in the third quarter, and that growth came almost entirely from expansion, as same-store sales at Borders and Waldenbooks fell 0.2% and 5.2%, respectively, and overseas comps were down as well. It's probably not surprising, then, that margins slipped and the company's net loss grew.

Some of the underperformance was self-inflicted. The company has been going through a store-remodeling program, and sales suffer at the locations undergoing remodeling. With 12% of the U.S. store base being remodeled this quarter, it's not hard to imagine a significant impact across the business. On a somewhat positive note, the company reports that newly remodeled stores post better comps -- though it's anybody's guess how long that boost will last.

Though Borders has generally been a consistent free cash flow producer, that's not going to be the case this year, with the remodeling program having inflated the capital expenditures figure. Again, only time will tell whether the money spent there will earn a compelling return on the investment.

This has been a tough year for the company and the stock, with estimates having been cut several times. The good news, such as it is, is that the valuation here isn't very high, and there's not that much debt. The company's cash flow history probably makes it worth keeping an eye on for value investors, but there's probably plenty of time to browse before buying.

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Amazon.com is a Motley Fool Stock Advisor recommendation.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).