Starbucks, facing slowing sales for its lattes and Frappuccinos, a slumping stock and agitation from activist investors, abruptly ousted its chief executive on Tuesday, replacing him with the chief executive of Chipotle Mexican Grill.
Brian Niccol, who has held the top position at Chipotle since 2018, will take the helm of Starbucks next month, the company said. He will replace Laxman Narasimhan, whose relatively brief tenure began in March last year, when he took over from Howard Schultz and became the first chief executive to come from outside the company. Mr. Niccol will also become board chairman. Starbucks’ chief financial officer, Rachel Ruggeri, will step in as interim chief executive until Sept. 9.
Analysts and investors largely cheered the move with Starbucks’ stock soaring more than 21 percent in morning trading.
The swift change in leadership at the coffee giant comes as it grapples with weakening results in some of its biggest markets, particularly the United States and China. Since the start of Mr. Narasimhan’s tenure, Starbucks shares have fallen more than 20 percent.
The steep drop in the stock and softening results in recent quarters had opened the door for activist investment groups to enter. Elliott Investment Management, which started building a position in the stock this summer, began pushing the company to make changes. Last week, a second activist group, Starboard Value, joined the fray.
The company framed the leadership change as led by its board of directors, not driven by the activist investors.
