Listed fast food giant Jollibee Foods Corp. (JFC) saw profits decline almost 10 percent in the first quarter as higher prices cut margins and weakened consumer spending, mirroring challenges across the food inudstry this year.

Its international operations, which are coming from a smaller base, managed to post double digit growth during the same period, the company added.

JFC reported to the Philippine Stock Exchange on Monday that net income slowed by 9.9 percent to P622 million even as revenues rose 13.7 percent to P13.97 billion.

System wide sales, which counts company-owned and franchised stores, rose 14.7 percent to P18.74 billion while operating income was flat at P856 million.

Jollibee said domestic sales were propped up by its flagship brand Jollibee and recently acquired Mang Inasal, although other brands noted a declined as consumer buying power weakened due to higher prices.

The international business segment grew 22.9 percent as the China operations alone grew 30.6 percent, the company said.

Chief financial officer Ysmeal Baysa noted in the disclosure that JFC took steps to improve operating expenses and implement price hikes but these “were not sufficient to cover the increase in the cost of raw materials and store manufacturing expenses”.

JFC shares slid 2.17 percent to P90 each on Monday’s close.

“The rising consumer prices and household expenses affected consumer’ food spending outside of home,” Tony Tan Caktiong, JFC chairman and chief executive officer, said in the statement.

While management had already been anticipating a slowdown in its first half performance, an analyst noted that Monday’s report still fell short of expectations.

“Net income was below our forecast and the markets consensus,” Kayelett Lubi, equities analyst with CitisecOnline, said in a phone interview. Profit came in at 19 percent of Citisec’s forecast, but the company's operations were in line with estimates, she added.

Lubi noted that the Citisec is maintaining its full year profit outlook of P3.26 billion, up by more than 8 percent. Total revenues are also expected to rise over 15 percent to P61.72 billion.

JFC operates the country’s largest fast food network with a total of 1,931 stores in the Philippines and 407 stores abroad. Its brands include Chowking, Greenwich, Red Ribbon, Caffe Ti-Amo, Mang Inasal as well as Chinese brands Yonghe King and Hong Zhuang Yuan.

During the first quarter, the group opened 51 stores worldwide, of which 33 are in the Philippines while 18 are in various overseas locations.