The deadly outbreak linked to McDonald's hamburgers continues to spread.

McDonald's is facing a decline in sales due to an E. coli outbreak linked to its Quarter Pounder hamburgers. The U.S. Food and Drug Administration has reported that at least one person has died from the outbreak, and the number of infections has reached 75. This situation has led to a 7% drop in the company's stock.

IS CHOPPED ONIONS THE CAUSE OF THE OUTBREAK?

Baird analyst David Tarantino warned that the outbreak could pose a significant threat to consumer sentiment and sales in the U.S. Tarantino noted that the duration of the problem and the media's attention would determine the outcomes. The Colorado Department of Agriculture identified chopped onions used in the hamburgers as a potential cause of the outbreak. The onions were reported to be supplied by Taylor Farms.

PRODUCT SALES HAVE BEEN SUSPENDED

McDonald's has suspended the sale of Quarter Pounders in some of its restaurants starting October 23 and plans to reintroduce the product to the menu this week. Wedbush analysts expect the effects of the outbreak to be limited and short-lived, while other analysts predict that McDonald's will be less affected by this outbreak compared to previous E. coli cases.

REVIVAL OF SALES MAY BE CHALLENGING

According to third-quarter results, McDonald's global store sales are expected to decline by 0.72%, and earnings per share are projected to be $3.20. The $5 meal campaign launched in June had shown signs of recovery in customer traffic. However, the prolonged negative publicity due to the outbreak may complicate the revival of sales.