McDonald’s stock fell after the CDC reported an E. coli outbreak linked to the Quarter Pounder

McDonald’s (MCD) stock fell about 5% in afternoon trading Wednesday after Centers for Disease Control and Prevention The company’s Quarter Pounder burger has been linked to E. coli outbreaks in some states, and most of the illnesses in Colorado and Nebraska, the company said.

“This is a rapid outbreak investigation,” the CDC wrote on its website. “Most patients reported eating McDonald’s Quarter Pounder hamburgers, and investigators are working quickly to confirm the contaminated food ingredients.”

The company’s stock fell as much as 10% in extended trading in the immediate aftermath of the news on Tuesday.

The Centers for Disease Control and Prevention said McDonald’s has stopped using fresh onion slices and quarter-pound beef patties in some states until the source of the illness is confirmed.

One person has died due to the outbreak, and 10 hospitalizations have been reported in 10 states, the agency said.

In an internal memo published by McDonald’s on its website on Tuesday evening, Cesar Peña, McDonald’s North America chief supply chain officer, said the company was taking “swift and decisive action” and noted that preliminary results of the investigation “suggest that a subset of illnesses may be linked to the cut onions used in the Quarter Pounder.” Through one supplier serving three distribution centers.”

“As a result, and in keeping with our safety protocols, all local restaurants have been instructed to remove this product from their supplies and we have temporarily suspended the distribution of all onion slices in the affected area,” the company said.

McDonald’s will temporarily remove the menu item from restaurants in affected areas, including Colorado, Kansas, Utah and Wyoming, as well as parts of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico and Oklahoma. All other menu items are available.

“While the incident appears to be more contained than other incidents we have seen in the industry, it is the expansion of the investigation or continued publicity that could impact consumer traffic,” BTIG analyst Peter Saleh wrote in a note to clients on Wednesday. .

He added that the incident may mitigate the continuation of the matter Big Mac Chicken and McRib offers for a limited time He is scheduled to complete the year.

“We believe McDonald’s can reduce its advertising support [limited-time offerings] He explained that the message may reach deaf ears amid wider news coverage. The company may also want to shift its messaging toward quality, and away from value, to reassure consumers about its nutritional safety.

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