Starbucks announced on Tuesday that CEO Laxman Narasimhan will step down as CEO, effective immediately, and will be replaced by Chipotle CEO Brian Niccol.
Starbucks Chief Financial Officer Rachel Ruggeri will serve as interim CEO until Niccol's position officially begins on September 9, 2024.
Chipotle CEO Brian Niccol (Robin Marchant/Getty Images)
Related: Laxman Narasimhan appointed as CEO of Starbucks
“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, along with hundreds of thousands of dedicated partners,” Niccol said in a statement to Starbucks investors. “As I embark on this journey, I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners while staying true to our mission and values.”
Narasimhan was appointed CEO of Starbucks in September 2022 before starting the role in March 2023.
Niccol has been CEO of Chipotle since 2018 and Chairman of the Board since 2020. Before that, he was CEO of Taco Bell for three years.
At Chipotle, Nicol has seen one challenging few months on criticisms of inconsistency portion sizes throughout restaurants, something he addressed in a Q2 2024 call with investors in July.
“There has never been a directive to offer less to our customers. A generous portion is a key brand equity of Chipotle. It always has been and always will be.” Nicole said. “With that said, receiving feedback has led us to review our execution across our system with the goal of always serving our friends delicious, fresh, personalized burritos and generously portioned bulls.”
Still, fast random chainsaw a Strong Q2with an 8.7% quarterly increase in restaurant traffic and a net income of $455.7 million, compared to $341.8 million at the same time last year.
The changing CEO of Starbucks
Starbucks has seen a lot of turnover in the role of chief executive officer the last one years, starting with former CEO Kevin Johnson, who stepped down in April 2022. Two-time CEO Howard Shultz stepped back to serve in the interim until Narasimhan was named CEO last fall. Before being named CEO of Starbucks, Narasimhan was CEO of Reckitt, a consumer health, hygiene and nutrition company.
Starbucks CEO Laxman Narasimhan attends the 2023 TAAF Annual CEO AAPI Dinner (JP Yim/Getty Images for Asian American Foundation (TAAF))
Shultz, who served in executive positions at the company for more than 40 years and holds the title of “Chairman Emeritus for Life,” criticized Narasimhan's leadership in a LinkedIn posting in May after a weak earnings report.
“In any company that loses badly, there must be repentance and renewed focus and discipline at the core. Own up to the shortcomings without the slightest excuse,” Shultz wrote at the time. “Senior leaders – including board members – need to spend more time with those wearing the green apron.”
On Tuesday, Shultz defended Nicol's appointment in a statement.
Related: Chipotle CEO addresses backlash over portion sizes: 'There was never a directive to serve less'
“Following Brian's leadership and transformation journey at Chipotle, I have long admired his leadership influence,” said Shultz. “I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my full respect and support.”
Former Starbucks CEO Howard Shultz (Leigh Vogel/Getty Images for The New York Times)
Starbucks and Chipotle did not immediately respond of the entrepreneur request for comment.
Forward market openingStarbucks was over 13%, while Chipotle was around 10%.
This is a developing story.