Shares in Papa John's ( PZZA) bucked a down market Wednesday after the pizza company said late Tuesday that domestic same-store sales decreased 3.7% in March but stuck to its robust full-year earnings forecast. The Louisville, Ky.-based company said sales were hurt in part by a 2% industrywide decline in fast-food pizza transactions in the first quarter -- the eighth straight quarterly decline. The company also said it expects higher cheese prices to hurt first-quarter and full-year 2004 net profit. Excluding that factor, the company reaffirmed its full-year earnings expectation, which comes in above analysts' projections. Shares of Papa John's were gaining 1.95 cents, or 6.27%, to $33.04 in Wednesday trading. For the first quarter, domestic same-store sales increased 0.5%, which was a 1.3% increase in company-owned restaurants and a 0.2% increase at franchise restaurants. International same-stores sales in the quarter increased 5.1%, on a constant dollar basis. Because of an increase in cheese prices, the financial results of Papa John's subsidiary BIBP Commodities, which are calculated in a way that sets the cost of cheese for its domestic restaurants on a quarterly basis, could be negatively affected. Because BIBP's results are consolidated with Papa John's results, Papa John's will likely be affected too. The company expects restaurant food costs to increase 60 to 70 basis points as a percentage of restaurant sales. At BIBP, however, increases in spot cheese prices have resulted in operating losses and a net deficit in shareholders' equity at the end of the first quarter, the company said. As a result, the consolidation of BIBP will reduce the company's first-quarter operating income by $1.5 million to $1.8 million. Analysts are calling for 55 cents a share in the first quarter. The cumulative net deficit in shareholders' equity for BIBP at the end of 2004 is expected to be $25 million, or 86 cents a share. Thus, 2004 earnings, including the expected impact from the consolidation of BIBP, are seen at $1.34 to $1.42 a share. Excluding the expected increase in cheese costs, full-year 2004 results are still seen at $2.20 to $2.28 a share, which compares with analysts' consensus for $2.08 a share.