By Anadolu Agency
August 13, 2024 3:41 pmANKARA
Starbucks announced Tuesday that it is replacing CEO Laxman Narasimhan with Brian Niccol, the chairman and CEO of the fast-food restaurant chain Chipotle, amid a plunge in sales.
Niccol will take the helm on Sept. 9 while Narasimhan is stepping down immediately, the company said in a statement.
The move comes after the US-based global coffeehouse chain saw a decline in sales for the second consecutive quarter, including falling demand in the US and China — its two biggest markets.
North America store sales fell 2% and US store sales were off by 2% in the April-June period of 2024, according to the company’s financial results statement released July 30.
Stores in the US and China comprised 61% of the company’s global portfolio at the end of that period, according to financial results.
The company saw only a 1% revenue increase in North America, while international revenues declined almost 7% to $1.84 billion from $1.97 billion year-on-year, results showed.
Starbucks shares were up approximately 21.4% on the Nasdaq at 10.53 a.m. EDT (1453GMT) after news about the CEO replacement.
Negative impact from boycott due to its support for Israel
Starbucks has been adversely affected by a boycott targeting international companies perceived as supporting Israel. The coffee giant, facing backlash and boycott campaigns in response to Israel’s actions in Gaza, reported weaker financial results over the last two quarters.
In the January-March period, Starbucks’ revenue dipped by 2%, with global sales marking their first decline since the end of 2020, falling by 4%.
During the April-June quarter, the company saw a further 0.6% drop in revenue, while global sales decreased by 3%.
Before becoming CEO of Chipotle, Niccol served as chief executive of another American fast food chain Taco Bell, in addition to serving in leadership roles at Pizza Hut, another division of Yum! Brands.
He also currently serves on the board of directors of retail giant Walmart.
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