Starbucks introduced on Tuesday that CEO Laxman Narasimhan is stepping down as CEO, efficient instantly, and can be changed by Chipotle CEO Brian Niccol.
Starbucks’ Chief Monetary Officer Rachel Ruggeri will function interim CEO till Niccol’s place formally begins on September 9, 2024.
Chipotle CEO Brian Niccol (Robin Marchant/Getty Photos)
Associated: Laxman Narasimhan Appointed As CEO Of Starbucks
“I’m excited to hitch Starbucks and grateful for the chance to assist steward this unimaginable firm, alongside a whole lot of hundreds of devoted companions,” Niccol mentioned in a Starbucks investor launch. “As I embark upon this journey, I’m energized by the great potential to drive development and additional improve the Starbucks expertise for our clients and companions, whereas staying true to our mission and values.”
Narasimhan was appointed CEO of Starbucks in September 2022 earlier than starting the position in March 2023.
Niccol has been CEO of Chipotle since 2018 and Chairman of the Board since 2020. Earlier than that, he was CEO of Taco Bell for 3 years.
At Chipotle, Niccol has seen a challenging few months over criticism of inconsistent portion sizes across eating places, one thing he addressed on a Q2 2024 name with buyers in July.
“There was by no means a directive to offer much less to our clients. Beneficiant portion is a core model fairness of Chipotle. It all the time has been, and it all the time can be,” Niccol said. “With that mentioned, getting the suggestions triggered us to relook at our execution throughout our whole system with the intention to all the time serve our friends scrumptious, contemporary, customized burritos, and bulls with beneficiant parts.”
Nonetheless, the fast-casual chain noticed a strong Q2, with an 8.7% quarterly improve in restaurant visitors and a web earnings of $455.7 million, in comparison with $341.8 million on the identical time final yr.
Starbucks’ Altering CEOs
Starbucks has seen loads of turnover within the chief govt position over the past few years, starting with former CEO Kevin Johnson, who stepped down in April 2022. Two-time CEO Howard Shultz stepped again in to serve within the interim till Narasimhan was appointed CEO final fall. Earlier than being named CEO of Starbucks, Narasimhan was the CEO of Reckitt, a shopper well being, hygiene, and vitamin firm.
Starbucks CEO Laxman Narasimhan attends the 2023 TAAF Annual AAPI CEO Dinner (JP Yim/Getty Photos for The Asian American Basis (TAAF))
Shultz, who labored in govt positions on the firm for over 40 years and holds the title “lifelong Chairman Emeritus,” criticized Narasimhan’s management in a LinkedIn submit in Could following a weak earnings report.
“At any firm that misses badly, there have to be contrition and renewed focus and self-discipline on the core. Personal the shortcoming with out the slightest semblance of an excuse,” Shultz wrote, on the time. “Senior leaders—together with board members—have to spend extra time with those that put on the inexperienced apron.”
On Tuesday, Shultz championed Niccol’s appointment in a statement.
Associated: Chipotle CEO Addresses Backlash Over Portion Sizes: ‘There Was Never a Directive to Provide Less’
“Having adopted Brian’s management and transformation journey at Chipotle, I’ve lengthy admired his management impression,” Shultz mentioned. “I imagine he’s the chief Starbucks wants at a pivotal second in its historical past. He has my respect and full help.”
Former Starbucks CEO Howard Shultz (Leigh Vogel/Getty Photos for The New York Occasions)
Starbucks and Chipotle didn’t instantly reply to Entrepreneur’s request for remark.
Earlier than market opening, Starbucks was up over 13%, whereas Chipotle was down round 10%.
It is a creating story.