McDonald’s takes massive sales hit from E. Coli outbreak

McDonald's sales were hit hard in the latest quarter due to an E. coli outbreak associated with slivered onions that killed one person and sent over 20 dozen to hospitals.

CEO Chris Kempczinski told analysts during a revenue call on Monday that sales in U.S. stores slipped 1.4% in the fourth quarter.

The company reported revenues of $63.9 billion, with Wall Street estimated at $6.444 billion.

Federal health officials declared the outbreak “closed” in December after the illness began in late October. According to the Centers for Disease Control, there were 104 confirmed cases of hospitalizations in 14 states. ). According to the CDC, one death occurred early.

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Raw onions were found to be a possible cause of the occurrence of a quarter of topping after the beef was excluded. The agency said it completed inspections at the Colorado Processing Factory in the Colorado Taylor Farmsfed McDonald's with recalled onions and supplied an unknown onion farm in Washington.

Once the outbreak was discovered, McDonald's removed a quarter of the pound from its menu at 900 restaurants in the affected area and stopped purchasing onions processed at Taylor Farms' Colorado Springs facility.

Executives said they had seen “strong sales” during the first weeks of October before the company began.

In the fourth quarter, there was slightly positive traffic at U.S. stores, but the company said customers were cutting spending. Part of the problem was that the quarter pounders were “high margins” items, according to executives.

Kempczinski said the effects of E. coli are now “localized in the area where the biggest impact was.”

On April 28, 2022, the autograph was posted in front of a McDonald's restaurant in San Leandro, California. (Justin Sullivan/Getty Images/Getty Images)

“Think of it as something like the Rocky Mountain area. It was really the epicenter of this issue, and it continues to be where we are heading for that impact,” he says. He added that the impact will be included in the area.

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The company expects to have fully recovered from food safety issues by the beginning of the second quarter.

Following the outbreak, executives said the company has regained trust by investing in “value, affordability and apparently digital offers to bring back consumers.”

McDonald's plans will further strengthen its value programme in the first quarter, “ensure that we make the most of the industry at the foundation and provide value.”

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Still, CFO Ian Borden told analysts that his approach to 2025 “reflects the current environment of softer, more and less traffic in the US and many larger markets.”