One expert argued that the outbreak may have come at an unfortunate time for McDonald’s
McDonald’s (NYSE:MCD) shares tumbled 5.12% to $298.57 Wednesday amid news that the fast food restaurant chain’s Quarter Pounder burgers were linked to an E. coli gastrointestinal disease outbreak in some U.S. states.
According to a report from the Centers for Disease Control and Prevention (CDCP), one person died from the E. coli outbreak, while 10 hospitalizations were observed across 10 states.
The greatest number of illnesses occurred in Colorado and Nebraska.
“This is a fast-moving outbreak investigation,” the CDCP said in a statement on its website.
“Most sick people are reporting eating Quarter Pounder hamburgers from McDonald’s and investigators are working quickly to confirm which food ingredient is contaminated.”
Cesar Piña, McDonald’s chief supply chain officer of North America, said that the company is taking “swift and decisive action” on the matter.
The initial findings from the E.coli investigation, Piña added, “indicate that a subset of illnesses may be linked to slivered onions used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers”.
McDonald’s stock fallout may be short-lived
While McDonald’s stock did fall slightly more than 5% on Wednesday after the E. coli outbreak news spread, it steadied on Thursday morning.
With the restaurant chain having temporarily removed the Quarter Pounder from menus in the impacted areas, the share price volatility may end here.
However, BTIG analyst Peter Saleh lacks confidence on this matter, arguing that “McDonald’s traffic was anemic before this incident, so any extended negative publicity could only make it more difficult to reignite sales“.
