Rainbow Rentals (RBOW) 8-K Rainbow Rentals Reports Results for 2003 Third Quarter and Nine Months

Exhibit 99.1

For more information, contact:

Nancy Davis	or	Dan Pecchia
Rainbow Rentals, Inc.		Innis Maggiore Group
(330) 533-5363, ext. 121		(330) 702-0490
ndavis@rainbowrentals.com		dan@innismaggiore.com

Rainbow Rentals Reports Results for 2003
Third Quarter and Nine Months

CANFIELD, Ohio (October 29, 2003) — Rainbow Rentals, Inc. (Nasdaq: RBOW) today reported financial results for its third quarter and nine months ended September 30, 2003.

Revenue for the quarter was $25.4 million, up 4.5 percent from $24.3 million for the comparable period of 2002. Revenue at comparable stores (opened on or before July 1, 2002) was up 1.1 percent. The increase in comparable store revenue was primarily the result of growth in stores opened in 2002, offset by lower seasonal rentals of air conditioners, the discontinued rental of accessory items and promotional offers that lowered initial rental rates.

Net income for the quarter was $217,000, or $0.04 per share, compared to net income of $335,000, or $0.06 per share, in the third quarter of 2002. The results were adversely affected by costs associated with six new stores opened during the year (including two stores opened during the quarter), increased expenses at comparable stores and higher general and administrative expenses, which offset an increase in comparable store revenues and continued improvements in gross rental margins.

“Although we were disappointed in the bottom-line results of our seasonally slow third quarter, we are pleased that our clearance initiative positioned us well for the fourth quarter, our busiest quarter of the year,” said Wayland J. Russell, chairman and chief executive officer. “New products in our stores now represent a larger portion of our inventory, which should make us more competitive in the fourth quarter. We also continued to benefit from better purchasing.

-more-

Rainbow Rentals Reports Results for 2003 Third Quarter and Nine Months
Page 2 of 3

“We are making several administrative changes to reduce expenses and improve customer response. Customer service responsibilities have been shifted from the home office to the regional managers. Additionally, we anticipate utilizing outside contractors, as needed, for new stores and remodeling in lieu of maintaining our own construction department.”

For the nine months ended September 30, 2003, revenue was $77.0 million, up 3.8 percent from the $74.1 million for the comparable period of 2002. Revenue at comparable stores (opened on or before January 1, 2002) was down 0.8 percent. Net income for the nine months was $926,000 or $0.16 per share, compared to net income of $1.3 million, or $0.23, per share for the comparable period in 2002.

Rainbow offers brand name, full-featured appliances, electronics, computers and furniture at 125 rental-purchase stores in 15 states — Connecticut, Georgia, Indiana, Kentucky, Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia. Rainbow also accepts product orders by phone and at its website, located at www.rainbowrentals.com. Established in 1986, Rainbow is headquartered in Canfield, Ohio, and employs nearly 900 associates.

-more-

Rainbow Rentals Reports Results for 2003 Third Quarter and Nine Months
Page 3 of 3

Statements in this release, other than those concerning historical information, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and are made pursuant to the “safe harbor” provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements are based on management’s current beliefs and assumptions regarding future events and operating performance and speak only as of the date of this release. These statements are likely to address growth strategy, future financial performance, strategic initiatives, marketing and expansion plans and the impact of operating initiatives. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of the company that could cause actual results to differ materially from those expressed or implied. These factors include risks associated with general economic conditions, failure to execute business plans, unforeseen issues beyond the company’s control, greater than expected expenses associated with company activities, effects of adopting new accounting pronouncements and other risk factors as described in the company’s annual 10-K report and other filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

# # #

RAINBOW RENTALS, INC.
STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)

				(unaudited)					(unaudited)
				For the three months ended					For the nine months ended
				September 30,					September 30,
				2003		2002			2003		2002
Revenues
	Rental revenue			$	24,017	$	22,921		$	72,474	$	69,523
	Fees				681		699			1,996		2,052
	Merchandise sales				739		724			2,487		2,570
			Total revenues		25,437		24,344			76,957		74,145
Operating expenses
	Merchandise costs				8,347		8,355			25,101		25,562
	Store expenses
		Salaries and related			6,674		6,055			19,801		17,863
		Occupancy			2,481		2,539			7,458		7,090
		Advertising			1,324		1,310			4,800		4,586
		Other expenses			3,875		3,318			10,965		10,123
			Total store expenses		14,354		13,222			43,024		39,662
			Total merchandise costs and store expenses		22,701		21,577			68,125		65,224
	General and administrative expenses				2,138		1,962			6,561		5,794
	Amortization of intangible assets				45		45			135		130
			Total operating expenses		24,884		23,584			74,821		71,148
			Operating income		553		760			2,136		2,997
Interest expense					137		135			434		487
Other expense, net					57		57			171		171
			Income from continuing operations,
			before income taxes		359		568			1,531		2,339
Income tax expense					142		207			605		924
			Income from continuing operations		217		361			926		1,415
Discontinued operations
	Loss from operations of discontinued store, net of tax				—		(26	)		—		(76	)
			Net income	$	217	$	335		$	926	$	1,339
Basic earnings per common share:
	Basic earnings per share from continuing operations			$	0.04	$	0.06		$	0.16	$	0.24
	Basic loss per share from discontinued operations				—		—			—		(0.01	)
			Basic earnings per share	$	0.04	$	0.06		$	0.16	$	0.23
Diluted earnings per common share:
	Diluted earnings per share from continuing operations			$	0.04	$	0.06		$	0.16	$	0.24
	Diluted loss per share from discontinued operations				—		—			—		(0.01	)
			Diluted earnings per share	$	0.04	$	0.06		$	0.16	$	0.23
Weighted average common shares outstanding:
	Basic				5,929,319		5,929,319			5,929,319		5,927,564
	Diluted				5,938,185		5,932,648			5,933,255		5,944,081