- Brian Niccol, former CEO of Chipotle, has been appointed as the new CEO of Starbucks after the company ousted Laxman Narasimhan due to declining same-store sales over the past two quarters. Investors are optimistic, with Starbucks shares rising 20% after the announcement.
- Niccol, who has been CEO of Chipotle since 2018, successfully guided the company through challenges like a foodborne illness scandal and the pandemic. Under his leadership, Chipotle’s stock surged over 770%.
- Niccol faces significant challenges at Starbucks, including managing a more complex business model with both domestic and international locations. The company is particularly struggling in China due to stiff competition and economic slowdowns.
Brian Niccol, former CEO of Chipotle, has been named the next CEO of Starbucks following the company’s decision to oust Laxman Narasimhan. Narasimhan, who took over the role in March 2023 after being handpicked by longtime CEO Howard Schultz, was removed amid declining same-store sales over the past two quarters. Rising inflation and increasing unemployment rates may have contributed to Starbucks’ recent sales struggles, as customers opt for more affordable alternatives to satisfy their caffeine cravings.
Investors are optimistic that Niccol can turn the company around. Starbucks shares surged by 20% following the announcement, marking their best performance since the company’s IPO in 1992. In contrast, Chipotle’s stock fell 9%, as shareholders reacted to the departure of the longtime executive.
Niccol has been CEO of Chipotle since March 2018 and successfully navigated the company through a foodborne illness scandal and the pandemic. Under his leadership, Chipotle has seen significant growth in traffic and sales, while many other restaurants have struggled in recent quarters. Chipotle’s stock has risen more than 770% since Niccol took the helm. The company reported second-quarter earnings in July that exceeded analyst expectations, with $2.97 billion in revenue. Net sales climbed 18.2% during the quarter, with same-store sales up 11.1%. Chipotle’s board has appointed Chief Operating Officer Scott Boatwright as interim CEO. Before joining Chipotle, Niccol was the CEO of Yum Brands’ Taco Bell.
Despite the positive response from investors, Niccol faces numerous challenges in his new role. Starbucks has a more complex business model than Chipotle, with company-operated and licensed stores, domestic and international locations, and a significant presence in China—a market that has struggled in recent years. The company faces stiff competition in China, and the country’s economic slowdown has further impacted Starbucks’ performance. With more international locations than U.S. cafes, Starbucks is relying on Niccol to navigate the international economic challenges that have hindered the company’s growth recently.