Struggling with weak demand and disgruntled investors, Starbucks announced Tuesday that its CEO, Laxman Narasimhan, will step down after just over a year.
The Seattle coffee giant said Brian Niccol, president and CEO of Chipotle, will be the new president and CEO of Starbucks effective September 9.
Starbucks shares rose more than 13% before the market opened.
Narasimhan, a longtime PepsiCo executive who was also CEO of Reckitt, a British healthcare company, became CEO of Starbucks in March 2023.
He replaced Howard Schultz, Starbucks’ longtime leader and chairman emeritus, who came out of retirement in 2022 to serve as interim CEO.
However, investors soon became dissatisfied with Narasimhan as the company’s sales weakened and it faced problems, including competition from lower-cost rivals in China and boycotts in the Middle East and other parts of the world, over its perceived support for Israel.
Starbucks Chairman Mellody Hobson said Nichol has transformed Chipotle since becoming CEO in 2018 by focusing on menu innovation, operational excellence and digital transformation.
“Brian is a culture champion who brings a wealth of experience and a proven track record of innovation and growth,” Hobson said in a statement. “Like all of us at Starbucks, he understands that an exceptional consumer experience depends on an exceptional partner experience.”
Schultz said he had admired Nicole for a long time.
“I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my full respect and support,” Schultz said in a statement.
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