McDonald's (MCD) is looking to recover ground as an E. coli outbreak disrupted business ahead of its Q3 earnings report.

On Tuesday before market open, McDonald's is expected to report revenue of $6.81 billion and earnings per share of $3.20, both up by a hair year over year. In the US, sales are expected to increase 0.19%. The quarter ended on Sept. 30, prior to the outbreak.

However, the majority of the focus among investors is likely on the outbreak. Sentiments are mixed as bears focus in on "uncertainty" around the "food safety fallout," per a note from TD Cowen analyst Andrew Charles. Bulls are encouraged by the relaunch of the McRib in December, a new national value platform in January, and chicken strips and wraps coming in May or June 2025.

In the US, Q3 sales growth was negative in July, driven by weakness from diners in the less than $45,000 income bracket and $45,000 to $75,000 income bracket, Wedbush analyst Nick Setyan wrote in a note to clients. But the launch of limited-edition collector's cups may have been a tailwind in the second half of the quarter.

The item "not only bolstered third quarter sales, but it is also evidence that the brand is strong and becoming less encumbered by a poor value perception," Evercore ISI analyst David Palmer said in August.

The earnings report comes as the Golden Arches is still investigating what led to an E. coli outbreak linked to its quarter pounders, leaving 75 people infected and 1 dead. On Sunday, the company announced it will resume distribution of fresh beef patties in the coming week to all restaurants after the Colorado Department of Agriculture ruled out quarter pounder patties for E. coli.

That leaves the onions as the potential source of the outbreak. This would be the first time onions would be linked to E. coli, a CDC spokesperson confirmed to Yahoo Finance, but the agency is still investing.

Per McDonald's North America chief supply chain officer Cesar Piña, the issue is "contained to a particular ingredient and geography," and the company decided to "stop sourcing onions from Taylor Farms’ Colorado Springs facility indefinitely." Burger King (QSR) preventatively removed onions from 5% of its restaurants despite no reported illnesses.

This outbreak comes as McDonald's was already tackling other issues like value perception while competitors like Yum! Brands (YUM), Burger King (QSR), and Wendy's (WEN) double down on their own price bundles.

McDonald's CEO Chris Kempczinski admitted in the company's Q2 earnings call that its "value leadership gap has recently shrunk."