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Starbucks announced on Tuesday that CEO Laxman Narasimhan is stepping 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, alongside hundreds of thousands of devoted partners," Niccol said in a Starbucks investor release. "As I embark upon 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 beginning 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, Niccol has seen a challenging few months over criticism of inconsistent portion sizes across restaurants, something he addressed on a Q2 2024 call with investors in July.
"There was never a directive to provide less to our customers. Generous portion is a core brand equity of Chipotle. It always has been, and it always will be," Niccol said. "With that said, getting the feedback caused us to relook at our execution across our entire system with the intention to always serve our guests delicious, fresh, custom burritos, and bulls with generous portions."
Still, the fast-casual chain saw a strong Q2, with 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.
Starbucks' Changing CEOs
Starbucks has seen a lot of turnover in the chief executive role over the past few years, beginning with former CEO Kevin Johnson, who stepped down in April 2022. Two-time CEO Howard Shultz stepped back in to serve in the interim until Narasimhan was appointed CEO last fall. Before being named CEO of Starbucks, Narasimhan was the CEO of Reckitt, a consumer health, hygiene, and nutrition company.
Starbucks CEO Laxman Narasimhan attends the 2023 TAAF Annual AAPI CEO Dinner (JP Yim/Getty Images for The Asian American Foundation (TAAF))
Shultz, who worked in executive positions at the company for over 40 years and holds the title "lifelong Chairman Emeritus," criticized Narasimhan's leadership in a LinkedIn post in May following a weak earnings report.
"At any company that misses badly, there must be contrition and renewed focus and discipline on the core. Own the shortcoming without the slightest semblance of an excuse," Shultz wrote, at the time. "Senior leaders—including board members—need to spend more time with those who wear the green apron."
On Tuesday, Shultz championed Niccol's appointment in a statement.
Related: Chipotle CEO Addresses Backlash Over Portion Sizes: 'There Was Never a Directive to Provide Less'
"Having followed Brian's leadership and transformation journey at Chipotle, I've long admired his leadership impact," Shultz said. "I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support."
Former Starbucks CEO Howard Shultz (Leigh Vogel/Getty Images for The New York Times)
Starbucks and Chipotle did not immediately respond to Entrepreneur's request for comment.
Before market opening, Starbucks was up over 13%, while Chipotle was down around 10%.
This is a developing story.
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