Starbucks CEO Laxman Narasimhan replaced by Chipotle’s Brian Niccol
Starbucks CEO Laxman Narasimhan is stepping down, about two weeks after the company reported another disappointing financial quarter.
The Seattle-based coffee company said early Tuesday that Chipotle CEO Brian Niccol take over the role on Sept. 9. Narasimhan’s resignation was effective immediately. He’s also leaving the board of directors.
Starbucks Chief Financial Officer Rachel Ruggeri will serve as interim CEO.
“On behalf of the board, I want to sincerely thank Laxman for his contributions to Starbucks, and his dedication to our people and brand,” Starbucks board chair Mellody Hobson said in a news release. “In the face of some challenging headwinds, Laxman has been laser focused on improving the business to meet the needs of our customers and partners.”
Narasimhan became CEO in March 2023, having moved from the U.K. to take the job. He was taking the role from Howard Schultz, who was in his third stint as Starbucks CEO. Schultz had come out of retirement in 2022 to serve as interim CEO after Kevin Johnson retired.
Under Narasimhan, Starbucks has had two quarters in a row of falling sales. Last quarter, sales at coffee shops fell by 3% compared to the previous year. Revenue has been buoyed by customers spending more per purchase, but investors have not been happy for numerous quarters.
In the previous quarter, Starbucks delivered a guidance cut and reported slumping sales, which set off a 12% share price drop in after-hours trading when earnings were reported.
In May, a week after a Starbucks earnings report said quarterly revenue dropped by 2%, Schultz blasted the company’s leadership for not spending enough time in stores or focusing on coffee drinks.
“I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” Schultz said in a LinkedIn post. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”
Niccol, the incoming CEO, has been leading Chipotle since 2018. Starbucks’ news release said that during his tenure, revenue has “nearly doubled, profits have increased nearly sevenfold and the stock price has increased by nearly 800%.”