Mixue Group shares continued to fall Friday, extending losses for a second consecutive session, after the Chinese fast-food chain said rising costs took a bite out of first-half profit.

The stock fell as much as 7.6% on Friday after closing 8.4% lower Thursday.

Mixue, known for its affordable ice cream and bubble tea beverages, on Thursday reported a 2.3% increase in first-half revenue from a year earlier to 15.22 billion yuan, equivalent to $2.26 billion.

However, the company said net profit dropped 15% to 2.32 billion yuan, weighed by rising costs and expenses.

Mixue's cost of sales rose 4.1% to 10.57 billion yuan, outpacing its revenue growth. The company attributed this primarily to investments to further beef up its product quality. Selling and distribution expenses climbed 23% on higher marketing and staff costs. Administrative expenses jumped 39%.

Looking ahead, Mixue said it will continue to deepen its presence in Southeast Asia, while pushing into new markets such as Central Asia and the Americas.

The company also plans to make its roly-poly mascot, Snow King--which has become a national icon on par with Ronald McDonald and Colonel Sanders--a global cultural symbol through animated series, comics, movies, featured merchandise and theme parks.

Jefferies analysts are cautious about Mixue's near-term average store sales and expects it to remain under pressure.

The company's first-half revenue per store declined 18%, weighed by factors including intensified competition in the industry, the analysts said. Management expects operating pressures to continue or even intensify in the second half as headwinds persist, they noted.