Discount bookseller Books-A-Million (NASDAQ:BAMM) may have reported an improved quarter, but how this company will duke it out over the long term remains to be seen.

Books-A-Million narrowed its third-quarter loss to $201,000, or $0.01 per share, compared to its net loss of $873,000, or $0.05 per share, this time last year. Sales increased 3.2% to $110.7 million, and same-store sales increased 2.3%. Both this year's and last year's third quarters included insurance gains related to stores that were permanently damaged by hurricanes.

Like Barnes & Noble (NYSE:BKS) said in its most recent earnings report, increased hardcover book sales helped Books-A-Million's comps. It cited some of the same bestselling authors, like John Grisham and Barack Obama. It also said that its selection of religious items did well, as well as adventure games.

There wasn't exactly a cornucopia of information available in Books-A-Million's press release; it didn't include a balance sheet or a cash flow statement, which isn't very impressive to the Foolish eye. However, some interesting items could be gleaned from its conference call. For example, the company said it cut its debt in half on a year-over-year basis, to $7.2 million from $14.7 million. However, for the full rundown, investors will have to wait until the company files its full financial statements with the SEC.

And of course, the all-important fourth quarter will help investors gain some insight, since it will include holiday sales. Books-A-Million had a very successful time of it in last year's holiday season.

Personally, though, I don't think there's much reason for investors to be excited about Books-A-Million. The fact that the company's third-quarter losses this year and last were mitigated by insurance payments doesn't really give much reason for excitement, either.

Furthermore, Books-A-Million may include many bestsellers at cut-rate prices, but it's got a limited selection. Plus, Barnes & Noble and Borders (NYSE:BGP) have strong loyalty programs, and Barnes & Noble plans on increasing its promotional price reductions for its loyal members. Both of those book-selling giants have much better selections than Books-A-Million, and of course there's (NASDAQ:AMZN), which is also a giant when it comes to selection and discounts.

Considering all this, the fact that Books-A-Million is trading at 25 times earnings seems pricey indeed. Given that this retailer has such stringent competition, I'd say handing over a premium for the stock sounds like a risky move at the moment. is a Motley Fool Stock Advisor recommendation. To find out what other companies David and Tom Gardner have recommended to subscribers, click here for a 30-day free trial.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a potboiler of a disclosure policy.