Starbucks CEO Replaced After Sales Decline

Starbucks has announced a significant leadership change, appointing Brian Niccol, the current CEO of Chipotle, to replace Laxman Narasimhan, who has been ousted after less than two years in the role. This decision comes in response to a notable decline in sales and growing customer boycotts linked to the company's perceived ties to Israel amid the ongoing conflict in Gaza. The board's decision follows pressure from activist investor Elliott Management and criticism from former CEO Howard Schultz, who had previously expressed concerns about Narasimhan's management style. In the interim, Starbucks' Chief Financial Officer Rachel Ruggeri will serve as the acting CEO until Niccol officially takes over on September 9. Ruggeri recently sold 3,750 shares of Starbucks stock for over $341,000, a move executed under a predetermined trading plan designed to avoid insider trading allegations. Following the announcement of Niccol's appointment, Starbucks shares surged by 24.5%, reflecting investor optimism about the new leadership. Niccol is recognized for his successful turnaround strategies at Chipotle, where he significantly boosted the company's stock value. His appointment is seen as a pivotal moment for Starbucks, which has faced challenges including its first drop in same-store sales in nearly three years. The company has also been embroiled in controversy over its legal actions against union Workers United, which further complicated its public image. As Starbucks navigates this transition, Niccol expressed enthusiasm about the company's potential for growth, signaling a new direction for the coffee giant amid ongoing challenges in the market.