REUTERS - Domino's Pizza Inc's revenue fell below analysts average estimate for the second quarter in a row and the company said the strong dollar would eat into full-year results more than it had forecast.
The company also reported third-profit below Wall Street's expectations, helping send its shares down nearly 6 percent on Thursday.
Domino's is the second-largest pizza chain by restaurant count, 5,067, in the United States, but all of its 6,562 outlets abroad are franchised, earning the company a percentage of their sales.
About 63 percent of the company's total sales last year came from supplying its owned and franchised outlets with ingredients and equipment to make pizzas.
U.S. companies with a substantial international presence have been hit as a strong dollar reduces the value of overseas sales. The average value of the dollar has risen about 17 percent in the latest third quarter from a year earlier.
Domino's revenue rose 8.5 percent to $484.7 million in the quarter, but missed estimates of $487.1 million, according to Thomson Reuters I/B/E/S.
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Net income rose 6.2 percent to $37.8 million, or 67 cents per share, but also fell short of estimates of 74 cents.
The Ann Arbor, Michigan-based company said higher insurance costs and a strong dollar each reduced profit by 6 cents per share.
Domino's now expects the dollar to reduce 2015 revenue by about $18-$20 million, compared with the $8-$12 million it forecast in January.
While the dollar hurts its international sales, Domino's has been outperforming rivals such as Pizza Hut at home, helped by investments in technology such as smart watches and digital wallets which make it easier for customers to place orders.
Sales at Domino's established company-owned U.S. restaurants rose 11.5 percent in the quarter and international same-restaurant sales increased 7.7 percent, excluding forex changes.
Both were in line analysts estimates, according to research firm Consensus Metrix.
In contrast, Yum Brands on Tuesday said Pizza Hut's same-restaurant sales were flat in the United States in the latest quarter.
Domino's shares fell to a low of $101.61, before paring some losses to trade down 5.4 percent at $102.21 at midday.
(Reporting by Lisa Baertlein in Los Angeles, Subrat Patnaik and Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza)