UPDATE 1-Indigo Books posts wider loss on Kobo investment

* Q1 per share loss $0.21 vs $0.09 yr ago

* Revenue $204.3 million vs $193.6 million

* Same-store sales up 1.5 pct at Indigo, Chapters

* Same-store sales down 0.7 pct at Coles, Indigo Spirit

TORONTO, Aug 9 (Reuters) - Indigo Books & Music Inc IDG.TO, Canada's largest bookstore chain, posted a greater-than-expected quarterly loss on Monday, due to its continued investment in Kobo Inc, its eReading division.

First-quarter net loss was C$5.3 million ($5.14 million), or 21 Canadian cents a share, for the period ended July 3, compared with a loss of C$2.8 million, or 9 Canadian cents, a year earlier.

Revenues rose 5.5 percent to C$204.3 million from C$193.6 million.

Analysts had, on average, forecast a net loss of 5 Canadian cents a share on revenues of C$200.90 million, according to Thomson Reuters I/B/E/S.

Same-store sales growth at its Indigo and Chapters superstores were 1.5 percent higher, while sales growth at its small-format Coles and Indigo Spirit stores were down 0.7 percent. Sales were little changed at

“The increased loss is not unexpected as we continue to invest significantly in the growth and development of Kobo. We expect this investment to pay off materially in the mid to longer term,” said Chief Executive Heather Reisman.

The board approved a quarterly dividend of 11 Canadian cents a share.

$1=$1.03 Canadian Reporting by Solarina Ho; Editing by Frank McGurty