GNC Holdings Inc. shares rose Thursday as it said it would shift more toward franchise locations, which have shown recent strength, though the company also reported earnings and revenue below Wall Street views for its latest quarter.

Shares were up 10.6% in midday trading to $46.81.

GNC said it expects to increase the proportion of new stores that are franchise locations and swap some company-owned stores to franchises. Other companies, such as restaurant chains Wendy's Co., Burger King Worldwide Inc. and DineEquity Inc.'s Applebee's, have recently been selling more company-owned restaurants to franchisees to help ensure more predictable cash flow and higher margins.

GNC also reduced the top end of its outlook for the year, saying it sees earnings of $3 to $3.10 a share, down from its April guidance of $3 to $3.15 a share.

For the quarter ended June 30, the company reported earnings of $67.4 million, or 79 cents a share, compared with $69.9 million, or 77 cents a share, a year earlier. Revenue rose 0.5% to $678.5 million, but same-store sales in domestic company-owned stores fell 2.8%.

Analysts polled by Thomson Reuters were looking for earnings of 80 cents a share on $683 million in revenue.

Revenue in the company's franchise segment increased 7.5%, helped by increased third-party wholesale product sales to domestic franchise operations.

But revenue in the retail segment dipped 0.3%, hurt by lower same-store sales. Revenue in the company's manufacturing and wholesale segment decreased 5.6%, hurt by lower third-party contract manufacturing revenue.

Write to Neil Haggerty at neil.haggerty@wsj.com

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