Higher advertising spending and store-opening costs reduced profits.
CANFIELD -- Profits at Rainbow Rentals continue to be lower.
The Canfield-based rent-to-own chain earned $394,000, or 7 cents a share, in the third quarter, compared with $579,000, or 10 cents a share, in the same quarter a year earlier.
The company said profits were down because of higher advertising spending and the impact of four new store openings. Cost reduction efforts at stores partially offset these higher costs, it said.
Revenue for the quarter was $22.7 million, which was down 4 percent from the same quarter last year. Revenue at stores open before July 1, 2000, declined 5 percent.
For the first nine months of this year, earnings were $1.3 million, or 23 cents a share, compared with $3.3 million, or 55 cents a share, during the same period last year.
Revenue for the first nine months of this year was $70.5 million, up 3 percent. Revenue at stores that were open before Jan. 1 was down 5 percent.
What's being done: Wayland Russell, company chairman and chief executive, said Rainbow is implementing new prices, which it expects to add to revenues and profits early next year.
He said the third-quarter results suffered because of increased promotions which relied heavily on price reductions and increased advertising.
He said he was pleased with the results because the promotions led to more units' being on rent in a quarter which is typically slow.
"Although our aggressive marketing and operational initiatives have affected our profitability in the short term, we are successfully rebuilding our recurring revenue stream," he said.
Rainbow has 113 stores in 11 states.