In This Story
Starbucks SBUX+8.64% stock jumped more than 20% at market open Tuesday after it announced that it would be replacing its chief executive, Laxman Narasimhan, with a food industry veteran.
The coffee giant tapped current Chipotle CMG+0.71% CEO Brian Niccol, who has helmed the fast-casual chain since 2018, as its new chief starting Sept. 9. During his tenure at Chipotle, “revenue has nearly doubled, profits have increased nearly sevenfold, and the stock price has increased by nearly 800%,” Starbucks said.
“We are thrilled to welcome Brian to Starbucks. His phenomenal career speaks for itself,” Starbucks board chair Mellody Hobson said. “Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth.”
Starbucks stock traded at $93.38 Tuesday morning, its highest level in nearly five months. The rise in share prices helped wipe out most of the Seattle-based company’s stock losses this year so far, and brought its market capitalization to $104 billion.
While Starbucks’ stock received a welcome boost from the news, shares of Chipotle fell 11% Tuesday morning following the announcement. Chipotle stock is up nearly 11% so far this year, with shares valued at $50.18 at market open. The stock moves shrunk Chipotle’s market cap to $68.39 billion.
The company carried out a 50-to-1 stock split in late June to help make shares, which were valued at more than $3,000 apiece, more accessible to investors.
Read more: Chipotle is leaning into ‘generous’ portion sizes after internet outcry
Niccol will step down as Chipotle CEO on Aug. 31, and chief operating officer Scott Boatwright will step in as interim chief as the company embarks on its search for a successor, the company said in a separate statement.
“Thanks to our robust talent planning process, we are well-prepared for events like this due to the deep bench within the organization,” said Scott Maw, Chipotle’s chairman of the board. “The board is excited to see other strong leaders expand their roles and provide growth and development for more people in the organization.”
Niccol is a veteran in the retail food industry. Prior to his time at Chipotle, Niccol served as Taco Bell CEO and in other C-suite positions at the brand, and had previously held leadership roles at Pizza Hut. He launched his career at consumer goods giant Procter & Gamble PG+0.17%.