Starbucks announced on Tuesday (August 13) the appointment of Chipotle Mexican Grill CEO Brian Niccol as the next Chairman and CEO of Starbucks, succeeding current CEO Laxman Narasimhan.
In a press release on Tuesday, Starbucks announced this significant personnel change along with the news that Niccol will assume office on September 9, while Narasimhan will resign effective immediately. During this transition period, Chief Financial Officer Rachel Ruggeri will serve as interim CEO. Starbucks board chair Mellody Hobson will become the lead independent director.
Amid this major adjustment at Starbucks, the struggling coffee chain is seeking to reverse its declining sales trend.
Troubled by sluggish sales in its two largest markets, the U.S. and China, the coffee giant has faced a challenging financial year. At the end of last month, the company reported another disappointing quarterly earnings, revealing a consecutive 3% drop in same-store sales and a 5% decline in customer traffic, with a 2% decrease in U.S. sales. Starbucks’ stock price has fallen by 23% over the past year.
Following the announcement of a new CEO, Starbucks stock surged nearly 19% at the opening on Tuesday, while Chipotle’s stock dropped by 9%. The news on Tuesday wiped out Starbucks’ year-to-date losses, potentially marking the largest single-day gain since its listing in 1992.
Starbucks is looking forward to Niccol’s arrival to bring transformative changes to the company’s operating model, seeking to improve sales performance.
Niccol joined Chipotle as CEO in March 2018 and became chairman of the board in March 2020. Prior to Chipotle, he served as CEO of Taco Bell and held leadership positions at Pizza Hut, another brand under Yum! Brands. His career started in brand management at Procter & Gamble.
Aside from his role at Chipotle, Niccol is currently a member of Walmart’s board of directors. He holds a Bachelor’s degree from Miami University and an MBA from the University of Chicago Booth School of Business.
“Since becoming CEO in 2018, Niccol has driven transformation at Chipotle,” Starbucks stated in Tuesday’s press release. “Under his leadership, revenue nearly doubled, profits increased nearly sevenfold, stock prices rose by almost 800%, while also raising wages for retail team members, expanding benefits, and strengthening corporate culture.”
Chipotle announced in a statement on Tuesday that Niccol will resign on August 31, with Chief Operating Officer Scott Boatwright serving as interim CEO.