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Jollibee's Q1 Profit Slides 39% Amid Cost Pressures

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Jollibee's Q1 Profit Slides 39% Amid Cost Pressures

Jollibee (PSE:JFC) logged a lower profit in the first quarter following a decline in operating profit and below-the-line items, as well as higher direct costs.

The Philippine fast food giant's attributable profit slid 39% year over year to 1.47 billion pesos from 2.50 billion pesos.

Diluted earnings per share fell 40% to 1.232 pesos from 2.062 pesos in the year-ago period.

Despite the decline, the first quarter results "reflect the resilience of our diversified portfolio," CEO Ernesto Tamantiong said in a press statement.

Revenue jumped 9% to 76.5 billion pesos from 70.2 billion pesos.

System-wide sales widened 10% to 113.9 billion pesos from 103.2 billion pesos. The indicator grew 8% in its Philippine businesses, led by grilled chicken fast-food chain Mang Inasal, up 16%, and the main Jollibee brand, up 7.6%.

Same-store sales growth increased 3.5%, with the Philippines segment rising 3.2% amid higher demand in March due to graduation-related spending and reflecting a higher base in the previous year due to election-related spending.

International same-store sales growth jumped 4%, led by its Vietnam business surging 26% and the North American market 4.6%.

Jollibee grew its footprint by 4.9% to 10,421 stores, with 3,499 in the Philippines and 6,922 abroad. The chain opened 181 gross new stores, with 149 international openings.

Direct costs jumped nearly 12% as inflation impacted certain commodities and supply chain items, the fast food chain said.

General and administrative expenses jumped 9.4% but advertising costs fell nearly 18%.

The fast-food giant plans to implement "measured" price increases starting in the second quarter while carrying out cost-management measures, Tamantiong said.

"We are managing today's cost volatility prudently, and we remain confident in our long-term growth outlook. As costs normalize over time, we remain focused on prudent capital allocation and sustaining profitable, long-term growth," Chief Financial and Risk Officer Richard Shin said.

Shares slid by as much as 8.8% to 147 pesos on Tuesday before closing 11% lower at 144 pesos.

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