McDonald's Stock Falls After CDC Reports E. Coli Outbreak Linked to Quarter Pounder

Shares of McDonald's (MCD) fell as much as 10% in after-hours trading on Tuesday after the Centers for Disease Control and Prevention said the company's quarter-pounder burgers were linked to an E. coli outbreak in some states with most illnesses occurring in Colorado and Nebraska.

“This is a rapidly moving outbreak investigation,” the CDC wrote on its website. “Most of those sickened report eating Quarter Pounder hamburgers from McDonald's, and investigators are working quickly to determine which food ingredient is contaminated.”

The CDC said McDonald's has stopped using fresh onion slices and quarter-pound beef patties in certain states while a cause of the illness is confirmed.

One person died as a result of the outbreak, the agency said, and 10 hospitalizations were reported in 10 states.

In an internal memo posted on its website by McDonald's on Tuesday evening, Cesar Piña, McDonald's chief supply chain officer for North America, said the company was taking “swift and decisive action” and noted that the initial results of the investigation “confirm “Suggest that a subset of illnesses may be associated with the onion slices used in the Quarter Pounder and are sourced from a single supplier serving three distribution centers.”

“As a result, and in accordance with our safety protocols, all local restaurants have been directed to remove this product from their offerings and we have ceased distribution of all onion slivers in the affected area,” the company said.

The menu item will be temporarily removed 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.

Fellow fast food giant Chipotle (CMG) experienced its own E. coli outbreak in 2015, along with a norovirus outbreak. The company was then forced to temporarily close 43 locations in Washington and Oregon.

The CDC declared the outbreak over in February 2016, when the company comprehensively overhauled its food preparation methods.

But it took years for the Mexican fast food giant to rebuild brand trust and recover its share price in the wake of the crisis. Shares are up more than 500% since 2016.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and send her an email at [email protected].

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