Starbucks has a new CEO

Yesterday, Starbucks revealed it walked into Chipotle and ordered itself a CEO. Brian Niccol, chief executive of the burrito chain, will be replacing Laxman Narasimhan as head of the coffee chain in September, the company announced.

Starbucks investors are more excited about the move than a teenager after their first kiss. The coffee chain’s shares soared 25% following the announcement, the largest single-day percentage increase since the company’s market debut in 1992, while Chipotle shares fell 8% (a total swing of ~$30 billion).

Driving the excitement is Niccol’s resume. He previously served as CEO of Yum Brands’ Taco Bell before taking over the top role at Chipotle in 2018. At the time, the burrito chain was reeling from a foodborne illness scandal – and Niccol is credited with its turnaround. During his tenure, Chipotle’s stock rose 773% (Starbucks shares are up just 35% for the same period, while the S&P 500 has gained 99%).

Big picture: A challenging consumer environment, worsening customer experience, and rising competition have hurt Starbuck’s performance. In its latest quarter, the chain reported a 3% decline in US same-store sales, as well as weak sales in China, its second-largest market.

👀 Looking ahead… In addition to these issues👆, Niccol will also have to navigate internal politics. Activist investor firm Elliot Management has built a stake in the chain, and Howard Schultz, longtime Starbucks CEO and its current sixth-largest shareholder, has no official position at the company but continues to be influential in its operations.