FILE PHOTO – A Domino’s Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson/File Photo GLOBAL BUSINESS WEEK AHEAD

(Reuters) – Domino’s Pizza Inc reported a smaller-than-expected rise in quarterly same-store sales in the United States and internationally on Thursday, as it battled competition from rival pizza chains and food delivery companies.

Same-store sales at Domino’s company-owned U.S. outlets rose 3.6 percent, the slowest pace in at least four years, while franchises posted 5.7 percent growth in the fourth quarter, both well below Wall Street expectations.

Analysts on average had expected same-store sales to rise 6.60 percent at company-owned U.S. stores and 7.25 percent at franchise stores, according to IBES data from Refinitiv.

Net income rose to $111.6 million, or $2.62 per share, in the fourth quarter ended Dec. 30, from $93.3 million or $2.09 per share, a year earlier, but also missed Wall Street forecast of earnings of $2.69.

Domino’s has led the way among pizza chains with investments in technology, cutting delivery times below 30 minutes and making its overall operation more efficient as it faces the threat of delivery “disruptors” like GrubHub and UberEats.

But the tech-led changes in delivery have still hurt it and rivals like Papa John’s and Yum Brands’ by making more restaurants’ food easily accessible to customers sitting at home on the couch.

Revenue from the international business, which is run by franchisees but provides Domino’s with revenue from ingredients, equipment and royalties, fell nearly 3 percent on the back of gains for the dollar.

International same-stores sales rose for the 100th consecutive quarter but growth of 2.4 percent was below expectations of 4.14 percent.

Total revenue rose to $1.08 billion but fell short of analysts’ average estimate of $1.10 billion for the second consecutive quarter.

Reporting by Aishwarya Venugopal in Bengaluru; editing by Patrick Graham


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