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Chipotle’s stock took a hit on Tuesday, plunging over 7% following the unexpected announcement that CEO Brian Niccol would be leaving to take the helm at Starbucks. Niccol, who has been instrumental in Chipotle’s remarkable recovery since 2018, will begin his new role next month (read more below).
| Company | Stock Price | % Change Today | Change in USD |
|---|---|---|---|
| Starbucks Corp | $95.90 | +24.50% | +$18.87 |
| Apple Inc | $221.27 | +1.72% | +$3.75 |
| NVIDIA Corp | $116.14 | +6.53% | +$7.12 |
| Nike Inc | $78.50 | +5.17% | +$3.86 |
| Amazon.com Inc | $170.23 | +2.06% | +$3.44 |
| Chipotle Mexican Grill | $51.68 | -7.50% | -$4.19 |
| Broadcom Inc | $156.16 | +5.07% | +$7.54 |
| Tesla Inc | $207.83 | +5.24% | +$10.34 |
Niccol’s tenure at Chipotle has been marked by a significant turnaround. When he joined the company, it was still reeling from a devastating E. coli outbreak that had severely impacted its reputation and financial health. Under Niccol’s leadership, Chipotle saw its annual revenues more than double, from approximately $4.5 billion in 2017 to $9.9 billion in 2023. The company’s stock also surged over 240% during this period, outpacing the broader market’s performance, which saw an 85% gain in the S&P 500 index .
However, his departure has left Chipotle in a state of uncertainty. Scott Boatwright, the current Chief Operating Officer, will step in as interim CEO. Investors reacted quickly to the news, sending Chipotle shares down by more than 7% .
Meanwhile, Starbucks is experiencing a very different market reaction. The coffee giant’s shares soared by more than 20% following the announcement of Niccol’s appointment . The leadership change comes at a critical time for Starbucks, which has been struggling with declining sales and customer dissatisfaction. The company has faced backlash over price increases and longer wait times, issues exacerbated by boycotts linked to its stance on the Israel-Gaza conflict. The firm reported a 3% drop in global sales in the quarter ending June 2024, with particular weakness in its key markets of the United States and China .
Niccol’s appointment at Starbucks is seen as a victory for activist investors, particularly Elliott Investment Management, which has been pushing for significant changes at the company. Elliott, known for its aggressive tactics in restructuring companies, had been advocating for a leadership overhaul at Starbucks, criticizing the direction under former CEO Laxman Narasimhan. This latest move marks another successful intervention by the firm, which has been at the forefront of reshaping the leadership at several major companies .
Howard Schultz, Starbucks’ former CEO and the architect of its global expansion, expressed his confidence in Niccol’s ability to lead the company through its current challenges. “He has my respect and full support,” Schultz said, emphasizing the importance of strong leadership during this pivotal time in Starbucks’ history .
As both companies adjust to these significant leadership changes, the stock market reactions underscore the high stakes involved. Investors will be closely watching how Chipotle navigates the transition without Niccol and whether Starbucks can recover under his leadership.