In this article, a week after health authorities publicly linked a deadly E. coli outbreak to McDonald’s Quarter Pounder burgers, the company’s CEO, Chris Kempczinski, informed investors that the situation is now resolved. Kempczinski stated during the company’s call on Tuesday that they consider the issue to be in the past and that the “situation appears to be contained.”
McDonald’s announced that Quarter Pounder burgers would be reintroduced to approximately a fifth of its U.S. locations, totaling around 3,000 restaurants, after removing the menu item due to the outbreak. Health authorities did not find any E. coli in the burger’s fresh beef patties, but the Food and Drug Administration is investigating the slivered onions used in Quarter Pounders as the probable source. McDonald’s has ceased sourcing onions from the supplier indefinitely, and about 900 locations will offer the Quarter Pounder without slivered onions.
Following the outbreak announcement, McDonald’s experienced a decline in daily sales and traffic at its U.S. restaurants as consumers reacted to the news, according to CFO Ian Borden. However, the company does not expect a significant impact on its business. McDonald’s is now focused on rebuilding consumer confidence and returning to the strong sales momentum seen earlier in October, driven by promotions like the $5 value meal and the Chicken Big Mac launch.
McDonald’s reported a 0.3% increase in U.S. third-quarter same-store sales compared to the previous year, surpassing estimates but slightly below the 0.5% growth projected by StreetAccount estimates. While the company exceeded Wall Street’s earnings and revenue expectations, its overall same-store sales declined by 1.5% due to reduced demand in key international markets.
Although McDonald’s stock initially dropped by up to 2.5% in premarket trading on Tuesday, it recovered during the conference call and remained relatively stable when the markets opened. Kempczinski expressed apologies to customers for the situation, acknowledging the impact on customers and emphasizing the company’s commitment to addressing the issue.
The outbreak has been linked to 75 health cases across 13 states, including one fatality of an older adult. Several lawsuits have been filed against McDonald’s by victims of the outbreak. The article has been updated to clarify that McDonald’s is reintroducing the Quarter Pounder to approximately 3,000 locations and that around 900 restaurants will serve the burgers without slivered onions.
