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HomeLocalMcDonald's CEO Responds to E. Coli Outbreak During Earnings Call: "Our Apologies...

McDonald’s CEO Responds to E. Coli Outbreak During Earnings Call: “Our Apologies Are Sincere”

 

McDonald’s CEO addresses E. coli outbreak on earnings call: ‘We apologize’


McDonald’s believes the E. coli outbreak linked to Quarter Pounders across 12 states won’t affect its financial results. CEO Chris Kempczinski expressed regret over the food safety issue.

As Quarter Pounders are set to return to all U.S. locations this week, McDonald’s has formally apologized for the E. coli outbreak, which has resulted in 75 illnesses and one death.

 

“We are genuinely sorry if anyone was made ill at our restaurant by consuming an onion from our Quarter Pounder,” expressed chairman and CEO Chris Kempczinski during a teleconference with investors on Tuesday. He noted relief that the situation seems to have been contained and is confident in the safety of dining at McDonald’s.

Kempczinski mentioned that the Quarter Pounders would return to the menu nationwide shortly, indicating optimism about getting back to serving customers.

 

McDonald’s sees U.S. sales rise, global sales fall by 1.5%

Prior to the outbreak, McDonald’s experienced a small increase in U.S. sales. For the July to September period, U.S. sales climbed 0.3%, largely due to the popularity of $5 Meal Deals, according to the company’s report released Tuesday.

The $5 Meal Deal contributed to a rise in orders exceeding $10 and attracted low-income customers for the first time in over a year, prompting McDonald’s to extend this offering in most restaurants until December.

 

Despite the E. coli outbreak being reported on October 22, it did not affect McDonald’s sales during the prior July to September timeline, and the company does not anticipate it will impact future business, as stated by CFO Ian Borden.

During October, along with the launch of the Chicken Big Mac, McDonald’s saw promising progress in the fourth quarter, which runs from October through December, with sales growth compared to the previous year.

 

Kempczinski acknowledged that the company’s performance this year has not met expectations.

This follows a drop in sales during the April-June period, marking the first decline in global sales since late 2020, when the pandemic severely hit the economy.

Worldwide, McDonald’s sales declined by 1.5% in the third quarter. The company reported nearly $6.9 billion in revenue, exceeding analysts’ predictions of $6.82 billion, although profits fell 3% to $2.25 billion, below the expected $2.3 billion.

Tuesday morning, McDonald’s shares increased nearly 1% after falling as much as 2% in pre-market trading.

 

E. coli outbreak linked to McDonald’s Quarter Pounders

The source of the E. coli outbreak has been traced to slivered onions served on Quarter Pounders. McDonald’s has halted the use of onions sourced from the Taylor Farms facility in Colorado Springs, where a Food and Drug Administration investigation is currently underway.

Beef patties used in the Quarter Pounders were tested and found free of E. coli, according to the Colorado Department of Agriculture.

 

The 900 restaurants that initially removed the sandwich will now offer Quarter Pounders without onions, with these locations situated in Colorado, Kansas, Wyoming, along with parts of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico, Oklahoma, and Utah.

As of October 25, health officials have reported a total of 75 E. coli infections across 13 states, including 22 hospitalizations and one death in Colorado. The infections occurred between September 27 and October 10, according to the Centers for Disease Control and Prevention. Additionally, two individuals developed hemolytic uremic syndrome, a serious condition potentially leading to kidney failure.

 

Health authorities suggest that the actual number of infected individuals may be higher, and McDonald’s indicated on Sunday that they expect the case numbers to rise. So far, three lawsuits have been filed against McDonald’s related to this outbreak, with legal representatives anticipating more lawsuits to follow.