Starbucks announced yesterday CEO Laxman Narasimhan will step down from his position after 17 months in office as the coffee giant tackles declining sales and increasing dissatisfaction among investors. Chipotle CEO Brian Niccol is set to become the new chairman and CEO, effective Sept. 9.
The replacement comes amid several challenges faced by Starbucks, including disappointing sales in key markets such as the US—down 3% in third quarter same-store sales this year—and China, where competition from lower-cost options declined same-store sales by 14%. The company also faced pressure from activist investors demanding changes. The news comes after former CEO Howard Schultz recently wrote an open letter criticizing the company's current leadership.
Under Niccol’s leadership, Chipotle has experienced accelerated growth, with a 14.3% increase in revenue in 2023. Following the new CEO announcement, Starbucks' shares closed up 24%, its best day since its 1992 initial public offering. Chipotle shares closed down 7%.
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