financetom
Business
financetom
/
Business
/
McDonald's shares fall as E. coli outbreak tied to Quarter Pounder kills 1 in US
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
McDonald's shares fall as E. coli outbreak tied to Quarter Pounder kills 1 in US
Oct 23, 2024 2:44 AM

(Reuters) - Shares of McDonald's fell nearly 6% in premarket trading on Wednesday after an E. coli outbreak linked to the restaurant chain's Quarter Pounder hamburgers resulted in the death of one person and sickened 49 people in the U.S.

At least 10 people were sent to the hospital and the outbreak was reported in 10 states, the U.S. Centers for Disease Control said on Tuesday. Cases were reported starting September and has continued in October.

In the past, two notable E. coli outbreaks - at Chipotle Mexican Grill in 2015 and Jack in the Box in 1993 - had significantly hit sales at the companies.

The E. coli O157:H7 strain that led to the McDonald's outbreak is said to cause serious illness and was linked to Jack in the Box's 1993 incident, which killed four children.

The latest outbreak could have been caused by the use of slivered onions used in the Quarter Pounder and was sourced from a single supplier that serves three distribution centers, McDonald's said based on its initial findings.

The fast-food chain has removed slivered onions and beef patties used in the burger and temporarily halted the sale of Quarter Pounder hamburgers at restaurants in the affected areas, the company said.

Analysts said fourth-quarter sales could see some pressure from the outbreak but it is too early to note if it would be worse than the previous two E. Coli cases.

"...while it is early, historical precedent suggests comp (comparable sales) pressures can trough quickly and prove transitory, assuming no recurrence," BMO Capital Markets analyst Andrew Strelzik said.

The timing was unfortunate for McDonald's and its investors, he said, as U.S. comparable sales had just begun to accelerate following the launch of $5 value meals.

The company's move to quickly replenish supplies should fix the problem, J.P. Morgan analysts said in a note, adding that it doesn't expect this to "engulf the U.S. or certainly international".

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Abinaya Vijayaraghavan and Arun Koyyur)

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Nov 28, 2023
The firm and dispatchable renewable energy (FDRE) project, designed with a hybrid of solar, wind, and battery storage, is aimed at providing a stable and dispatchable energy supply during peak hours. Shares of Tata Power Company Ltd ended at ₹270.75, up by ₹12.60, or 4.88%, on the BSE.
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Nov 15, 2023
Th Suzlon wind turbines received the RLMM (Revised List of Models & Manufacturers) listing from the Ministry of New and Renewable Energy, marking an important milestone for the successful commercialisation of the product. Shares of Suzlon Energy Ltd ended at ₹40.49, up by ₹1.85, or 4.79%, on the BSE.
SJVN secures 200-MW wind power project at ₹3.24 per unit
SJVN secures 200-MW wind power project at ₹3.24 per unit
Nov 16, 2023
Projected to generate 482 million units in its inaugural year post-commissioning, the cumulative energy generation over a 25-year span is anticipated to reach 12,050 million units. Shares of SJVN Ltd ended at ₹75.17, down by ₹0.50, or 0.66%, on the BSE.
This sustainable jewellery brand is luring some women away from gold
This sustainable jewellery brand is luring some women away from gold
Oct 30, 2023
Aulerth's offerings range from ₹5,000 to as high as ₹2.8 lakh. Are women willing to spend this much on jewellery made from scrap? Founder and CEO Vivek Ramabhadran definitely believes so. Aulerth produces couture-inspired pieces in association with designers like JJ Valaya, Suneet Varma, among others. It has reported 33% repeat customers in the past year and expects a spike to 40% soon.
Copyright 2023-2026 - www.financetom.com All Rights Reserved