Chipotle CEO Brian Niccol succeeds Laxman Narasimhan as Starbucks' new CEO.

• Starbucks has ousted CEO Laxman Narasimhan, effective immediately.
• On September 9, Brian Niccol will become the new CEO of the coffee chain.
• In recent quarters, Starbucks has faced challenges in its sales due to decreasing demand in its largest markets, the U.S. and China.

announced Tuesday it's replacing CEO Laxman Narasimhan with CEO Brian Niccol.

In premarket trading, Starbucks' shares rose 10%, while Chipotle's stock fell by the same amount.

In March 2023, Narasimhan became the new CEO of the coffee giant. Despite strong performance in other markets, the company has struggled this year due to weak sales in the U.S. and China, its two largest markets. Former CEO Howard Schultz, who had chosen Narasimhan as his successor, wrote an open letter in May offering advice on the company's issues but never mentioning Narasimhan by name. Recently, activist investor Elliott Management acquired a stake in the company.

During Narasimhan's tenure, Starbucks' shares have dropped 21%, except for Tuesday's movement.

Immediately effective, Narasimhan's departure will be filled by Starbucks CFO Rachel Ruggeri as interim chief executive until Sept. 9, when Niccol officially assumes the top job.

Since 2018, Niccol has been Chipotle's CEO, where he helped the chain recover from a foodborne illness scandal and navigate the pandemic. Despite a decline in consumer spending at other restaurants in recent quarters, Chipotle has experienced an increase in traffic and sales.

Scott Boatwright, Chipotle's COO, will serve as interim CEO of the burrito chain, while Jack Hartung, the CFO who was planning on retiring next year, will now stay on as president of strategy, finance, and supply chain.

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