McDonald’s Chris Kempczinski speaks about fresh beef expansion at a McDonald’s event in Oak Brook, Illinois.
Richa Naidu | Reuters
Per week after health authorities publicly linked a deadly E. coli outbreak to McDonald’s Quarter Pounder burgers, the corporate’s CEO, Chris Kempczinski, told investors that the situation is now behind them.
“How we have handled the difficulty, now that we’re moving … we view it as being behind us,” Kempczinski said on the corporate’s call Tuesday.
During his prepared remarks, he said that the “situation appears to be contained.”
On Sunday, McDonald’s said Quarter Pounder burgers would return to roughly a fifth of its U.S. footprint where the corporate had pulled the menu item following the outbreak. That amounts to roughly 3,000 restaurants, the corporate told CNBC Tuesday.
Health authorities didn’t detect any E. coli within the burger’s fresh beef patties, however the Food and Drug Administration continues to be investigating the slivered onions which can be utilized in Quarter Pounders because the likely source. McDonald’s has stopped sourcing onions from the supplier indefinitely, and around 900 locations will serve the Quarter Pounder sans slivered onions.
McDonald’s saw every day sales and traffic to its U.S. restaurants turn negative in the times immediately following the outbreak announcement as consumers reacted to the news, CFO Ian Borden said. He added that the corporate is not anticipating a fabric impact to the business.
Now McDonald’s is targeted on reassuring diners and returning to the upper sales it had been seeing earlier in October, fueled by its $5 value meal and the launch of the Chicken Big Mac.
“What I’d say is we definitely consider essentially the most significant events are behind us, and the work to do at once is targeted on restoring consumer confidence, getting our U.S. business back to that strong momentum that I just talked about,” Borden said.
On Tuesday, McDonald’s reported U.S. third-quarter same-store sales that increased 0.3% over the prior-year period, reversing a decline throughout the second quarter but barely weaker than the 0.5% growth projected by StreetAccount estimates.
McDonald’s beat Wall Street’s estimates for its quarterly earnings and revenue, but its overall same-store sales fell 1.5%, fueled by weaker demand in key international markets.
Shares of McDonald’s fell as much as 2.5% in premarket trading on Tuesday but recovered throughout the conference call. The stock was roughly flat when the markets opened.
Earlier on the decision, Kempczinski apologized to customers for the situation.
“The recent spate of E. coli cases is deeply concerning, and hearing reports of how this has impacted our customers has been wrenching for us,” Kempczinski said. “On behalf of your entire system, we’re sorry for what our customers have experienced. We provide our sincere and deepest sympathies, and we’re committed to creating this right.”
As of Friday, 75 health cases across 13 states have been tied to the outbreak, including one death of an older adult.
At the very least three lawsuits have already been filed against McDonald’s by victims of the outbreak.
Clarification: This story has been updated to make clear that McDonald’s is returning the Quarter Pounder to roughly 3,000 locations after pulling the menu item following an E. coli outbreak. About 900 restaurants will serve the burgers without slivered onions.
