Jollibee rolls out cost containment plan as margins come under pressure

Jollibee Foods Corporation is implementing a 2.8-billion pesos (US$45.3 million) cost containment programme as it moves to protect margins and sustain long-term growth amid mounting inflationary and geopolitical pressures.

The group said the initiative will focus on disciplined cost controls, selective capital expenditure deferments, and targeted pricing actions, while continuing to invest in high-performing growth areas across its international portfolio.

The move comes after the company posted a 38.8% decline in first-quarter net income attributable to equity holders, falling to 1.5 billion pesos (US$24.3 million) as elevated commodity and supply chain costs weighed on profitability. Operating income also dropped 18.2% to 3.9 billion pesos (US$63.1 million), while EBITDA margin narrowed to 12.2%.

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Despite the earnings pressure, the company’s topline momentum remained resilient. Consolidated revenues rose 9% year-on-year, while systemwide sales grew 10.3%, driven by strong performances from brands including Jollibee, Mang Inasal, Compose Coffee, Highlands Coffee and Tim Ho Wan.

Richard Shin, chief financial and risk officer of JFC and CEO of Jollibee Group international business, said the company is taking a measured approach to spending reductions rather than implementing broad cuts.

“So there is a cost containment plan, both at the corporate office but also at the business units. And I will caveat this by saying that we’re going to be smart about it. If there’s a growth plan like Tim Ho Wan where we’re getting very good returns on our headcount or store investments, of course we’re going to continue to do that,” Shin said.

“But the way we’re looking at capex right now, we’re making sure that it’s very choiceful, and wherever we need to defer, we’ll defer as the situation still needs to be observed. But nonetheless, on the three quarters ahead of us, we’re committed to 2.8-billion-peso cost savings,” he added.

JFC had earlier outlined plans to open between 1,200 and 1,300 stores in 2026, backed by capital expenditures ranging from 13 billion pesos (US$210 million) to 16 billion pesos (US$259 million). During the first quarter alone, the group opened 181 stores globally, including 149 international locations, bringing its total network to 10,421 stores across 33 countries.

International expansion continued to be led by coffee and tea concepts, which accounted for 103 of the new store openings. The company also highlighted continued momentum in China through Yonghe King’s franchise-led expansion strategy.

Alongside cost containment efforts, JFC has begun implementing scheduled price increases from April to help offset margin compression while maintaining consumer demand.

“Moderate single-digit price increase is required now to not only recover some of the profit loss that happened in the first quarter, but also to cushion the balance of the year’s inflationary pressures,” Shin said.

JFC CEO Ernesto Tanmantiong said the company remains focused on balancing near-term pressures with long-term expansion ambitions.

“Our first quarter results reflect the resilience of our diversified portfolio and the continued strength of consumer demand across our markets. We are encouraged by the healthy sales momentum across our businesses and the sustained expansion of our international footprint,” Tanmantiong said.

“While the operating environment remains dynamic, we are taking disciplined steps to manage near-term volatility through measured price increase beginning in Q2, alongside thoughtful and targeted cost management initiatives, while continuing to advance sustainable growth and long-term shareholder value,” he added.

The company said the current macroeconomic environment is not expected to affect the timeline for the proposed IPO of Highlands Coffee in Vietnam or the planned US listing of JFC’s international business unit by late 2027.

“On Highlands, it’s very simple. There is absolutely no correlation to inflation to our listing time. And the JFC international listing, I am prohibited to say too much, but we are absolutely targeting the same dates to IPO,” Shin said.

The quarter also saw JFC complete the acquisition of South Korean hot pot chain Shabu All Day through its subsidiary Jolli-K Co. Ltd. The acquisition is expected to contribute approximately 2% to group revenues and 8% to global EBIT annually.

Meanwhile, Compose Coffee opened its first international branch in Taiwan, generating strong opening-day demand ahead of a planned Philippine launch.

JFC also continued to gain international recognition during the quarter. Jollibee was ranked the fifth strongest restaurant brand globally in the 2026 Brand Finance Restaurants report, while the group’s flagship brand remained the only Philippine and Southeast Asian restaurant brand included among the world’s top 25 most valuable restaurant brands.

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