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Papa John's sees 2010 adj profit below market view
(Reuters) - Pizza chain Papa John's International Inc (PZZA.O) forecast a 2010 adjusted profit below market expectations as volatility in cheese prices continues to hurt its business, but said it sees an uptick in international system-wide sales.
Costs for ingredients like cheese and wheat have eased from last year's high levels, but it remains difficult to convince diners to spend money on meals away from home.
The company, which competes with Domino's Pizza Inc (DPZ.N) and Yum Brands Inc's (YUM.N) Pizza Hut, forecast 2010 profit of
$1.70 to $1.90 a share, compared with analysts' view of $1.74 a share, according to Thomson Reuters I/B/E/S.
The company said the forecast excludes the impact of its BIBP cheese purchasing unit, but includes potential volatility related to 2010 cheese prices.
Papa John's also expects 2010 revenue to increase 3 percent to 5 percent, helped by worldwide unit growth, improved royalty rates and higher commissary sales prices.
International system-wide sales in 2010 are expected to jump 15 percent to 20 percent at the pizza chain, with domestic system-wide sales swinging from positive 1 percent to negative 1 percent.
It plans to open 140 to 180 new units in 2010.
The company also stood by its earlier profit estimate of $1.42 to $1.46 a share for 2009.
Shares of the Louisville, Kentucky-based company closed at $21.65 Monday on Nasdaq.
(Reporting by Shradhha Sharma in Bangalore; Editing by Gopakumar Warrier)
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