Shares of McDonald’s fell as much as 6% on Wednesday after an E. coli outbreak that sickened nearly 50 people and killed one was linked to the Golden Arches’ famous Quarter Pounder hamburger.
Shares of the world’s largest burger chain fell from $314.70 per share on Tuesday to $299.61 per share by Wednesday morning.
“This public health concern is the last thing McDonald’s needs as it already struggles to drive growth,” said Susanna Streeter, head of wealth and markets at Hargreaves Lansdown.
At least 49 people have fallen ill That includes 10 people who were hospitalized after eating the burgers, the Centers for Disease Control and Prevention said Tuesday.
The CDC said the cases were reported in 10 states and were mainly concentrated in Colorado and Nebraska.
The E. coli O157:H7 strain that caused the McDonald’s outbreak can rapidly cause serious illness.
This is the same deadly strain that was linked to the 1993 Jack in the Box outbreak, which killed four children and infected more than 700 people in four US states.
The CDC said it was investigating which McDonald’s ingredient was responsible for the illnesses.
According to the CDC, McDonald’s has stopped using fresh chopped onions and quarter-pound beef patties at its locations in several states.
The CDC urged customers who experience symptoms of diarrhea, fever, vomiting or dehydration after eating a McDonald’s Quarter Pounder to contact their healthcare provider.
Analysts have said the E. coli cases could hurt McDonald’s fourth-quarter sales.
On Wednesday, McDonald’s President Joe Erlinger tried to allay growing concerns and reassure customers they can safely return to restaurant locations.
“We’re confident you can go to McDonald’s and enjoy our classics,” Erlinger told the Today Show on Wednesday“We took immediate action yesterday to remove the Quarter Pounder from our menu.”
McDonald’s did not immediately respond to a request for comment.
In July, McDonald’s reports surprising sales decline – the first decline since 2020 – as cash-strapped customers rebelled against the Golden Arches’ price hikes.
The timing was unfortunate for McDonald’s and its investors, said BMO Capital Markets analyst Andrew Strelzik. The chain’s comparable sales were just starting to bounce back as its popular $5 meal deal won over customers hit by sticky inflation.
Both Jack in the Box and Chipotle — which sparked two E. coli outbreaks in 2015, as well as salmonella and other disease epidemics in 2018 — suffered severe reputation damage and sales losses as customers turned to Fast -Lost confidence in food chains.
The Jack in the Box outbreak was discovered after the Washington State Department of Health reported a large number of cases of hemolytic uremic syndrome – a serious disease that affects the kidneys caused by E. coli – in the chain’s burgers among Seattle-area children. Cases detected in.
Raymond James analyst Brian Vaccaro said Chipotle took a year and a half to stabilize, while Jack in the Box saw four consecutive quarters of sales decline.
In the year and a half following the Jack in the Box E. coli outbreak, restaurants lost approximately $160 million in sales and court fees, According to attorney Bill MarlerWho represented customers during the Jack in the Box and Chipotle outbreaks.
In 2015, Chipotle saw its $17 billion market cap drop by nearly $6 billion as investors became nervous about the illnesses.
with post wires
