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On August 13, Starbucks announced that Brian Niccol, the CEO of Chipotle Mexican Grill, will replace Laxman Narasimhan as the chairman and chief executive officer of the coffee chain. Niccol is scheduled to officially begin his new position on September 9. Until then, Rachel Ruggeri, the CFO of Starbucks, will take on the role of interim CEO.
In a blog post, Starbucks expressed confidence in Niccol’s ability to lead the company through a transformative phase, emphasizing his potential to drive growth and innovation. Niccol expressed his enthusiasm about joining Starbucks and acknowledged the opportunity to collaborate with the company’s global team.
Narasimhan, who took over as CEO in September 2022, will step down from his role and leave the Starbucks board immediately. His departure follows a challenging period for the company, which in May 2024 cut its financial guidance for the third consecutive quarter and reported its first sales decline since late 2020. Narasimhan had previously been the CEO of Reckitt, a UK-based health and nutrition company, and held long-term executive roles at Pepsico.
The announcement of Niccol’s appointment led to a notable market reaction: Starbucks shares surged 12% in premarket trading, while Chipotle’s shares dropped 10%. This leadership change comes amidst increased scrutiny from activist investors Elliott Investment Management and Starboard Value, who have been pushing for changes within Starbucks, including board adjustments and operational reviews.
In the meantime, Chipotle’s board has appointed Scott Boatwright, the current chief operating officer, as the interim CEO. Mellody Hobson, the chair of Starbucks’ board, will assume the role of lead independent director following Narasimhan’s departure.