GNC Corp. officials yesterday reported flat revenues and a big dip in profits for the third quarter but said they are seeing signs that a massive turnaround strategy is beginning to bear fruit at company-owned stores.

Sales at franchise General Nutrition Center locations have been slower to improve, however, and officials at the Pittsburgh-based vitamin retail chain said they expect to continue a program of reacquiring struggling stores into the next fiscal year.

GNC reported consolidated revenue of $322.6 million for the three months ended Sept. 30, down slightly from $323.1 million in the year-ago period. Overall net income fell to $3.2 million, down from $8.5 million.

The numbers, officials said, reflect difficult comparisons with strong 2004 sales of low-carb diet products, as well as profit margins trimmed by GNC's decision at the beginning of the year to cut prices on key items and to offer rebate programs to help franchisees. One-time financial hits in the quarter included a $1 million settlement of a third-party product lawsuit and hurricane-related losses of $900,000.

Overall revenue would have been hit harder by lost diet supplement sales if not for growth in sales of sports nutrition, herbs and vitamin products, the company said.

President and Chief Executive Officer Bruce Barkus, who joined GNC in the summer, hailed a 1 percent gain in sales at domestic company-owned stores open at least a year. The number -- considered a key sign of retail strength because it factors out the impact of opening new locations -- marked the best performance in almost two years.

Meanwhile, comparable store sales at domestic franchise locations dipped 4.7 percent. Officials said that reflected a lag in franchise operators implementing new initiatives that can be more quickly applied to company stores, as well as the drag from some underperforming franchises.

The company has been the subject of complaints from franchisees, including some involved in litigation and others trying to form an independent franchisee group. Among the charges is that GNC does not offer them fair prices, an issue cited as a factor in a steady stream of stores being reacquired by the company.

Officials told analysts on an earnings conference call yesterday that they believe the majority of franchisees have a good relationship with GNC and have sales results close to those of company stores. But they also said problem stores that do not respond to efforts to turn around their performance will be reacquired.

GNC had 1,212 domestic franchise stores at the end of this year's third quarter, or 102 fewer than at the same time last year. Officials expect they could reacquire 30 to 40 more by year-end.

The company operates 2,633 of its own stores domestically. More than 1,100 Rite Aid stores sell GNC products and there are more than 800 international franchise locations.