Taco Bell is showing signs of recovery after a recent cyclospora outbreak linked to its shredded iceberg lettuce, according to executives at its parent company, Yum! Brands. The outbreak, which affected nearly 2,000 people across nine states, prompted Taco Bell to remove lettuce supplied by Taylor Farms within 72 hours of being notified by public health officials. Taylor Farms is a major produce supplier with operations in Mexico, which federal regulators have identified as a source of the contamination.

The parasitic illness, cyclosporiasis, causes symptoms such as diarrhea and stomach cramps and tends to spike in the summer months. This year, U.S. health authorities have confirmed or are investigating more than 18,000 cases in 45 states, including 423 hospitalizations. The Food and Drug Administration (FDA) has indicated that multiple cyclospora outbreaks may be occurring independently, not all linked to Taco Bell.

Following the lettuce removal, Taco Bell saw a significant decline in customer traffic, with same-store sales down about 2 percent in the current quarter as of late July. Sales were hardest hit around mid-July but have since stabilized, aided by aggressive promotional efforts. Yum! Brands CEO Chris Turner highlighted that transparency and swift action helped maintain customer trust, noting that social sentiment measures for Taco Bell had returned to pre-outbreak levels.

To encourage customers back, Taco Bell has focused on deep discounts targeted toward loyalty program members through its app. Recent promotions included $1 Enchiritos—a burrito-enchilada hybrid—and $1 Mexican Pizzas, which sold at a fraction of their usual price. The chain’s “Tuesday Drops” events, known for generating significant app traffic, saw record engagement with these offers. Turner described the Mexican Pizza promotion as the most successful Tuesday drop in Taco Bell’s history, generating positive transaction growth.

Despite the outbreak’s impact, Taco Bell entered the incident as one of the strongest performers in the fast-food sector, having reported a 7 percent increase in same-store sales in the second quarter ending June 30. Yum! Brands as a whole saw a 3 percent rise in comparable sales at stores open at least a year, driven primarily by Taco Bell, with KFC also posting modest gains. Pizza Hut, another Yum! brand, continued to face challenges and recently was sold for $2.7 billion.

Overall, Yum! Brands reported quarterly revenue of $2.17 billion, up 12 percent year-over-year, with operating profit increasing 5 percent to $655 million. Shares in the company rose more than 3 percent following the earnings announcement.

While the cyclospora outbreak caused a temporary disruption for Taco Bell, executives remain optimistic about the brand’s ability to recover quickly, emphasizing that consumers recognize the broader industry context of the issue rather than attributing the problem solely to the chain. The company’s rapid response and customer engagement strategies are central to its efforts to regain momentum in what remains a competitive fast-food market.