McDonald's Chris Kempczinski talks about the expansion of fresh beef at a McDonald's event in Oak Brook, Illinois.
Richa Naidu | Reuters
A week after health authorities publicly linked the deadly E. coli outbreak to… McDonald's Quarter Pounder Burger CEO Chris Kempczinski told investors the situation was now behind them.
“How we dealt with this issue, now that we're moving on…we're looking at it as behind us,” Kempczinski said on the company's call Tuesday.
“It appears the situation has been contained,” he said during his prepared remarks.
McDonald's said Sunday that its Quarter Pounder burger will return to roughly one-fifth of its U.S. presence as the company pulled the menu item following the outbreak. That amounts to nearly 3,000 restaurants, the company told CNBC on Tuesday.
Health authorities have not detected any E. coli bacteria in the burger's fresh beef patties, but the Food and Drug Administration is still investigating the chopped onions used in the Quarter Pounder as a possible source. McDonald's has stopped sourcing onions from the supplier indefinitely, and about 900 locations will serve the Quarter Pounder without sliced onions.
McDonald's Chief Financial Officer Ian Borden said daily sales and traffic to its U.S. restaurants turned negative in the days immediately after the outbreak was announced, as consumers reacted to the news. He added that the company does not expect any material impact on the business.
McDonald's is now focusing on reassuring diners and returning to the high sales it saw earlier in October, boosted by its $5 meal and the launch of the Chicken Big Mac.
“What I would say is that we certainly believe the most significant events are behind us, and the work we need to do now is focused on restoring consumer confidence and getting our U.S. business back to that strong momentum that I just talked about,” Borden said.
On Tuesday, McDonald's reported third-quarter U.S. same-store sales rose 0.3% from the same period a year earlier, reversing a decline during the second quarter but slightly weaker than the 0.5% growth expected by StreetAccount estimates.
McDonald's beat Wall Street estimates for its quarterly profit and revenue, but its overall same-store sales fell 1.5%, due to weak demand in key international markets.
McDonald's shares fell as much as 2.5% in premarket trading Tuesday but recovered during the conference call. The stock was roughly flat when markets opened.
Earlier in the call, Kempczinski apologized to customers for the situation.
“The recent wave of E. coli cases is deeply concerning, and hearing reports about how this is impacting our customers has been distressing for us,” Kempczinski said. “On behalf of the entire system, we are sorry for what our customers have endured. We offer our sincere and deep condolences, and we are committed to making this right.”
As of Friday, 75 health conditions in 13 states had been linked to the outbreak, including the death of an elderly adult.
At least three lawsuits have already been filed against McDonald's by victims of the outbreak.
Clarification: This story has been updated to clarify that McDonald's will bring back the Quarter Pounder to nearly 3,000 locations after recalling the menu item following an E. coli outbreak. About 900 restaurants will serve burgers without sliced onions.
