McDonald’s’ Chris Kempczinski talks fresh beef expansion at a McDonald’s event in Oak Brook, Illinois.
Richard Naidu | Reuters
A week ago, health authorities publicly linked a deadly E. coli outbreak to McDonald’s Quarter Pounder Burger CEO Chris Kempczinski told investors that situation is now behind us.
“Now that we’re taking action, how we dealt with this issue … we think it’s behind us,” Kempczinski said on the company’s conference call Tuesday.
“The situation appears to be under control,” he said in prepared remarks.
On Sunday, McDonald’s said the Quarter Pounder will return to about 900 restaurants where the company has removed menus following the outbreak.
Health authorities have not detected any E. coli in the burger’s fresh beef patty, but the Food and Drug Administration is still investigating the onion strips used in the quarter-pound burger as a possible source. McDonald’s has indefinitely stopped purchasing onions from suppliers and will reinstate the Quarter Pounder to the menu without onion sticks.
McDonald’s Chief Financial Officer Ian Borden said that as consumers responded to the news, daily sales and traffic at McDonald’s U.S. restaurants experienced negative growth in the days after the epidemic was announced. He added that the company does not expect a significant impact on its business.
Now, McDonald’s is focused on reassuring diners and returning to the higher sales seen in early October, driven by $5 value meals and the launch of the Chicken Big Mac.
“I would say that we certainly believe that the most important event is behind us and the focus now is on restoring consumer confidence and getting our U.S. business back to the strong momentum I just talked about,” Borden said.
On Tuesday, McDonald’s reported that third-quarter U.S. same-store sales increased 0.3% compared with the same period last year, reversing the downward trend in the second quarter, but slightly weaker than StreetAccount’s forecast of 0.5% growth.
McDonald’s quarterly profit and revenue beat Wall Street forecasts, but its same-store sales fell 1.5% overall due to weak demand in key international markets.
McDonald’s shares fell 2.5% in premarket trading Tuesday, but recovered during the conference call. The stock was essentially flat at the open.
Earlier, Kempczinski apologized to customers during a conference call for the incident.
“The recent spate of E. coli cases is deeply concerning, and it is painful for us to hear reports of the impact this is having on our customers,” Kempczinski said. “On behalf of the entire system, we apologize for our customers’ experience. We offer our sincere and deepest sympathies and are committed to correcting this issue.”
As of Friday, 75 health cases in 13 states were linked to the outbreak, including the death of an elderly person.
Victims of the outbreak have filed at least three lawsuits against McDonald’s.
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