Martin Lee
Starbucks (NASDAQ:SBUX) sent shockwaves through the restaurant industry on Tuesday with its announcement that it will replace CEO Laxman Narasimhan at Chipotle Mexican Grill (New York Stock Exchange: CMG) Chief Executive Officer Brian Niccol.
Niccol joined Chipotle (CMG) as CEO and Director in March 2018 and became chairman of the board in March 2020. Before joining Chipotle (CMG), served as CEO of Yum! Brands (Mmmmm) Taco Bell. He also held leadership positions at Pizza Hut, another division of Yum! Brands. He began his career in brand management at Procter and Gamble (Page). It is worth noting that Niccol currently serves on the board of directors of Walmart (WMT).
Niccol will assume her new role almost immediately. Starbucks (SBUX) Chief Financial Officer Rachel Ruggeri will serve as interim CEO until Sept. 9, when Niccol will officially assume the top job at the giant coffee chain.
In an interview with the media, Starbucks (SBUX) President Mellody Hobson said the decision to replace Narasimhan was not based on a single quarter. She also said that Niccol will present his own plans for the company and the brand.
Starbucks (SBUX) and Chipotle (CMG) ranked second and third in the restaurant sector by market capitalization, behind only McDonald's (MCD).
Starbucks Corporation (SBUX) shares soared 12.8% in pre-market action to trade at its highest level since late April. Dutch Bros (BROS), which often trades directionally with SBUX, rose 1.1% in the early session. Meanwhile, Chipotle (CMG) traded 7.9% Starbucks' (SBUX) announcement came amid a period of investor anxiety in the restaurant sector as major operators such as McDonald's (MCD), Yum! Brands (YUM), Brinker International (EAT), Darden Restaurants (DRI) and Wendy's (WEN) struggle with consumer price resistance.
