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Brian Niccol: Starbucks’ new CEO Brian Niccol to fly…

21 August 2024
by admin

At a time when most employees struggle in public transport daily to reach the office and people are becoming aware of the climate crisis, the news is that Starbucks’ new CEO Brian Niccol will fly 1600 kilometres daily in a private jet for work. Yes, you read that right!
After Indian-American business executive Laxman Narasimhan‘s departure as the CEO of Starbucks, the coffee giant has now announced Brian Niccol as their new CEO from September 2024.However, Niccol will have an unusual commuting arrangement with the company. Niccols, who lives in California, will be commuting to Starbucks’ headquarters in Seattle via a private jet every day, instead of relocating to his new work location, as per several reports. With this arrangement in place, Niccol will be traveling 1,600 kilometres at least three days per week, as Starbucks has a hybrid work policy.

Starbucks plans to ditch disposable cups by 2030 to reduce waste and greenhouse gas emissions

Explaining Niccol’s work schedule and responsibilities at Starbucks, a spokesperson from the company said, as per reports, “A majority of Brian’s time will be spent at our Seattle Support Center, visiting our stores, roasteries, and other facilities worldwide.”
As the new CEO of Starbucks, Brian Niccol, 50, will have a base salary of $1.6 million per year. On top of this, he would get a performance-based cash bonus which could be from $3.6 million to $7.2 million. And he will also get annual equity awards up to $23 million, as per reports.
Before Starbucks, Niccol was the CEO of Chipotle since 2018, and he had a unique commuting arrangement there too. Since Chipotle’s headquarters was in Denver and Niccol lives in California, the company’s headquarters was shifted from Denver to California for Niccol. However, under his leadership, Chipotle’s stock rose by 772%, as per reports. As Starbucks is facing a decline in its sales in the US and China, the company hopes that bringing Niccol as the new CEO would help them improve their profits.
While the news of Starbucks’ new CEO travelling 1600 kms via a private jet amused some people, few others have called out the CEO and the company for being indifferent towards the growing climate crisis. A user named mahi_veyyyyy said on Instagram, “Wow what a great initiative to increase carbon footprints on a daily basis 👏👏👏….Sustainability my foot…. The bloody double standards and hypocrisy of these big brands,” another user named priyal bhiwapurkar said, “And they make cups and straws sustainable! :)”. Some netizens also commented on the faulty hybrid work mode, wherein employees are supposed to come to office for a few days per week. “Just work from home bro,” dev_vrat_tripathi wrote on Instagram, resonating with the sentiments of many others.
Meanwhile, this is not the first time that such unusual steps have been taken by a company for their CEOs. For instance, Rihanna’s lingerie brand Fenty x Savage’s new CEO Hillary Super was also given a similar arrangement. On being appointed as the CEO, she worked from New York City instead of working from the company’s headquarters in Columbus, Ohio.
What are your views on this? Tell us in the comments below.

Science & Environment

Why Wall Street thinks Brian Niccol is the person…

13 August 2024
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Brian Niccol, CEO of Chipotle

Anjali Sundaram | CNBC

Wall Street believes Brian Niccol is the right choice to turn around Starbucks — and move the chain past the decadeslong Howard Schultz era.

Starbucks tapped Niccol as its latest chief executive and chair on Tuesday. Niccol replaces Laxman Narasimhan, who took over the top job in March 2023 after being handpicked by former CEO Schultz. In its last two quarters, Starbucks reported same-store sales declines as its U.S. business floundered. Once he takes over, Niccol will be charged with rejuvenating demand for the company’s coffee.

“In our view, Starbucks picks up a hall of fame restaurant CEO, and his appointment as Starbucks CEO and Chairman suggests a new era is underway,” TD Cowen analyst Andrew Charles wrote in a note to clients, emphasizing the importance of the combined role.

Investors are confident that he can revive the company. Shares of Starbucks climbed 20% in afternoon trading on the news, putting them on pace for their best day since the company’s IPO in 1992. Meanwhile, Chipotle’s stock fell 9% as shareholders bemoaned the loss of the longtime chief executive.

Piper Sandler, TD Cowen and Baird all upgraded Starbucks stock in the wake of the leadership changes.

Other analysts wrote glowingly of Niccol, seeing him as the right person to tackle Starbucks’ sluggish sales. A challenging consumer environment, worsening customer experience and rising competition from smaller coffee shops have hurt the chain’s performance recently.

“We view this as a dream hire for SBUX, and could not think of a more equipped leader to take a fresh look at SBUX’s operations, competitive positioning and overall strategy,” Oppenheimer analyst Brian Bittner said.

End of an era?

Niccol’s hiring could also spell the end of Schultz’s huge influence over the company he turned into a global coffee giant.

“Importantly, Brian is likely the one restaurant executive that has the gravitas to address the Howard Schultz Founder ‘overhang,'” Evercore ISI analyst David Palmer wrote.

Schultz served as CEO from 1986 to 2000, from 2008 to 2017 and then from 2022 to 2023, stepping in twice to save the company when sales turned sluggish. His last return sparked concerns about the company’s succession.

At the end of his last stint, he swore that he wouldn’t return as chief executive again, although his presence still looms large over the company. In May, after a brutal quarter for Starbucks, he wrote an open letter on LinkedIn about the company’s challenges and offered advice to its leaders — without naming Narasimhan.

Even after his retirement, Schultz’s involvement in the company has remained “a question hanging over the stock,” Morgan Stanley analyst Brian Harbour wrote in a note Tuesday. Mellody Hobson, who stepped down as Starbucks chair to become lead independent director as part of Tuesday’s leadership shake-up, said on CNBC’s “Squawk Box” that she told Schultz about the discussions with Niccol, keeping him in the loop despite him having no formal role within the company anymore.

Schultz also remains a major Starbucks shareholder, with a roughly 2% stake.

Schultz endorsed Niccol’s hiring in the press release announcing the shakeup. In a statement, the chairman emeritus said he believes that Niccol is the leader the company needs at a “pivotal moment in its history.”

Some analysts believe that having Niccol, an experienced restaurant CEO, in the driver’s seat could mean that Schultz finally moves on. Niccol will also succeed Hobson as chair of the board, giving him more latitude to make changes.

“This will be the last time investors care what he has to say because Niccol now has the wheel and there is no longer ANY room for a backseat driver,” Gordon Haskett analyst Don Bilson wrote.

Niccol also has previous experience taking over a founder-led brand and making it his own. When he joined Chipotle in 2018, he took the reins from founder Steve Ells, who had led the chain since 1993. Niccol moved the burrito chain’s headquarters from Denver to Newport Beach to attract different talent — and maybe evolve the brand from being founder-led, as Bernstein analyst Danilo Gargiulo wrote in a note.

Challenges ahead

While analysts largely cheered Niccol’s appointment, some were more cautious, noting that Starbucks is a larger and more complex business than Chipotle.

“Starbucks is a much more complicated model than Chipotle, with company and licensed stores, domestic and international locations, and a significant presence in struggling China,” BTIG analyst Peter Saleh wrote.

Chipotle has few licensed locations, except for some airport restaurants, and a relatively small international footprint, although Niccol has been pushing to grow its presence outside the U.S. in recent years.

Starbucks, on the other hand, has more international locations than U.S. cafes. And while investors have recently focused on the chain’s domestic performance, China, its second-largest market, has continued to struggle as competition there ramps up and the country’s economy lags.

Narasimhan said on the company’s latest conference call that he was exploring “strategic partnerships” for its China business, which could include a joint venture, tech partnership or other options. Niccol’s appointment could mean that Starbucks abandons that exploration, although he does have some experience with spinoffs from his time as head of Yum Brands’ Taco Bell. While he was there, the conglomerate spun off its China business into Yum China.

And while Chipotle’s burritos are still in high demand, consumers’ economic concerns have dampened their desire for coffee. That may prove to be a tougher hurdle for Niccol than investors anticipate.

“His challenge is to connect with a new customer,” Wedbush analyst Nick Setyan said. “Aside from the power to change the direction of macro headwinds, we view the shareholder euphoria (as expressed in the share price this morning) as premature.”

Science & Environment

Starbucks ousts CEO Laxman Narasimhan for Chipotle replacement –…

13 August 2024
by admin

WASHINGTON: Satya Nadella has taken Microsoft to dizzying heights and Sundar Pichai hasn’t done too badly with Alphabet/Google either. From FedEx CEO (Raj Subramanium) to the CEO of grocery chain Albertsons (Vivek Sankaran), Indian-American success in c-suites beyond tech companies is the stuff of lore.
But in a rare setback to the story, Starbucks announced on Tuesday that it is replacing its CEO Laxman Narasimhan after only 16 months at the helm, after indicating he failed to arrest the beverage chain’s flagging sales.Investor activism and disappointment at Narasimhan’s performance on part of Starbucks’ chairman emeritus Howard Schultz, who handpicked him as CEO, are reasons being attributed for the ouster.
Narasimhan will be leaving immediately and be succeeded by Chipotle CEO Brian Nichol, the company said in a statement.
The Pune-born Narasimhan joined Seattle-headquartered Starbucks as CEO and moved from London, where he was previously CEO of the consumer goods company Reckitt Benckiser. His taking over came with slowing sales at Starbucks’ primary markets, US and China, which he could not staunch, despite, according to one account, the six months he spent learning about Starbucks’ business, including training as a barista. Starbucks’ stock dropped more than 20 per cent during his leadership.
Meanwhile, Chipotle has been on a tear since Nichol’s took over in 2018 after previously helming Taco Bell and Pizza Hut. It’s stock has soared more than 700 per cent under him as US customers have begun to disdain vanity drinks for more essential food during inflationary times.
In a typical pro-forma statement, Starbucks’ board thanked Narasimhan for his services, saying, “In the face of some challenging headwinds, Laxman has been laser focused on improving the business to meet the needs of our customers and partners. We all wish him the very best and know he will do great things in the future.”

Science & Environment

Starbucks Appoints Chipotle CEO Brian Niccol To Replace Laxman…

13 August 2024
by admin

New Delhi: Starbucks has named Brian Niccol, the chairman and CEO of Chipotle, as its new CEO. He will take over the coffee giant starting on September 9, replacing Laxman Narasimhan, who has been with the company since March 2023.

Notably, the coffee giant is struggling with weak demand and disgruntled investors and made this decision to revive flagging sales and appease outside investors.

Starbucks Share

Starbucks shares jumped more than 13 per cent before the market opened. Narasimhan, a longtime PepsiCo executive who has also served as the CEO of Reckitt, a UK-based consumer health company, became Starbucks’ CEO in March 2023. He succeeded Howard Schultz, the longtime Starbucks leader and chairman emeritus who came out of retirement in 2022 to serve as the company’s interim CEO.

But investors quickly soured on Narasimhan as the company’s sales weakened and it dealt with multiple issues, including competition from lower-cost competitors in China and boycotts in the Middle East and elsewhere because of its perceived support for Israel.

Mellody Hobson, the chair of Starbucks’ board of directors, said Niccol has transformed Chipotle since becoming its CEO in 2018 by focusing on menu innovation, operational excellence and digital transformation.

“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” Hobson said in a statement. “Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience,” Schultz said he has long admired Niccol.

He further said, “I believe he is the leader Starbucks needs at a pivotal moment in its history”. (With Inputs From AP)

Science & Environment

Starbucks CEO Laxman Narasimhan Quits, Brian Niccol Appointed New…

13 August 2024
by admin

Struggling coffee chain Starbucks on Tuesday said its CEO Laxman Narasimhan is stepping down immediately after just a year in the role. Chipotle CEO Brian Niccol will be its new chairman and CEO, effective September 9.

Niccol has been leading Mexican-inspired food chain Chipotle since 2018. Starbucks in a statement said Niccol has set “new standards in the industry and driven significant growth and value creation”, pointing to its revenue growing nearly 800 per cent during his tenure.

Starbucks chief financial officer, Rachel Ruggeri, will serve as interim CEO until that time. Mellody Hobson, Starbucks board chair, will become lead independent director, Starbucks said in the statement.

“We are thrilled to welcome Brian to Starbucks. His phenomenal career speaks for itself. Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth. Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience,” said Hobson. “Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world.”

Niccol said: “I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, alongside hundreds of thousands of devoted partners.”

“I have long-admired Starbucks iconic brand, unique culture and commitment to enhancing human connections around the globe. As I embark upon this journey, I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners, while staying true to our mission and values,” he added

Laxman Narasimhan is stepping down from his role as ceo and as a member of the Starbucks board with immediate effect. During his tenure, he improved the Starbucks partner experience, drove significant innovation in our supply chain, and enhanced our store operations, Starbucks stated.

“On behalf of the board, I want to sincerely thank Laxman for his contributions to Starbucks, and his dedication to our people and brand,” said Hobson. “In the face of some challenging headwinds, Laxman has been laser focused on improving the business to meet the needs of our customers and partners. We all wish him the very best and know he will do great things in the future.”

Niccol joined Chipotle as Chief Executive Officer and a director in March 2018, and became Chairman of the Board in March 2020. Before joining Chipotle, he served as Chief Executive of Taco Bell. Before becoming CEO he held roles including Chief Marketing and Innovation Officer, and President. He also served in leadership roles at Pizza Hut, another division of Yum! Brands. He began his career in brand management at Procter and Gamble.

Mohammad Haris

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experi…Read More

Science & Environment

Starbucks replaces CEO Laxman Narasimhan with Chipotle CEO Brian…

13 August 2024
by admin

Chipotle CEO Brian Niccol.

Source: Chipotle

Starbucks announced Tuesday it’s replacing CEO Laxman Narasimhan with Chipotle CEO Brian Niccol.

Shares of Starbucks rose 10% in premarket trading on the news, while Chipotle’s stock fell 10%.

Narasimhan took over as chief executive in March 2023. The coffee giant’s performance has struggled this year, hurt by weak sales in the U.S. and China, its two largest markets. Former CEO Howard Schultz, who handpicked Narasimhan as his successor, had written an open letter in May, weighing in on the company’s issues and offering advice but never addressing Narasimhan by name. Activist investor Elliott Management had acquired a stake in the company in recent weeks.

Narasimhan’s departure is effective immediately. Starbucks CFO Rachel Ruggeri will step in as interim chief executive until Sept. 9, when Niccol officially takes over the top job.

Niccol has served as Chipotle’s CEO since 2018. Prior to that, he led Yum Brands’ Taco Bell. As CEO of Chipotle, he helped the chain rebound from its foodborne illness scandal and led its restaurants through the pandemic. In recent quarters, while other restaurants have reported a sharp pullback in consumer spending, Chipotle has seen its traffic and sales climb, bucking the trend.

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

This is breaking news. Please refresh for updates.

Science & Environment

Starbucks revenue misses estimates as same-store sales decline for…

30 July 2024
by admin

Starbucks glass art on a store in Tokyo.

Jakub Porzycki | Nurphoto | Getty Images

Starbucks on Tuesday reported quarterly revenue that missed analysts’ expectations as both its U.S. and international cafes faced weaker demand.

Still, the results weren’t as bad as investors feared. Shares of the company rose more than 5% in extended trading.

Here is what the company reported compared to what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 93 cents adjusted vs. 93 cents expected
Revenue: $9.11 billion vs. $9.24 billion expected

The coffee giant reported fiscal third-quarter net income attributable to the company of $1.05 billion, or 93 cents per share, down from $1.14 billion, or 99 cents per share, a year earlier.

Excluding items, Starbucks earned 93 cents per share.

Net sales dropped 1% to $9.11 billion. The company’s same-store sales fell 3% in the quarter, fueled by a 5% decline in transactions.

Traffic to its U.S. stores fell again this quarter, dropping 6%. Domestic same-store sales fell 2%, boosted by an increase in average ticket. Last quarter, executives discussed plans to revive the lagging U.S. business that included leaning on discounts and new drinks to bring back customers who had abandoned the chain.

CEO Laxman Narasimhan said on Tuesday that more shoppers are buying its packaged coffee at grocery stores, but a “challenging consumer environment” is weighing on sales at its cafes.

Still, the company sees green shoots in the U.S. business already, like the success of new products. Its Summer-Berry Refreshers drinks with boba-inspired pearls broke the company’s record for a week-one product launch. Next quarter will also bring the return of its Pumpkin Spice drinks, a perennial favorite since its launch more than two decades ago.

The company now allows customers to order via its mobile app and pay without joining its rewards program. Improvements to its app also mean that it’s more accurate at predicting when an order will be ready, lowering customer complaints. In a letter posted on LinkedIn after last quarter’s gloomy report, former CEO Howard Schultz said the company needed to fix the mobile app experience to win back customers.

Schultz isn’t the only investor upset with Starbucks’ performance lately. Activist hedge fund Elliott Management has accrued a stake in Starbucks. Narasimhan acknowledged that the firm is a shareholder in Starbucks and said conversations so far have been constructive.

Outside of North America, same-store sales slid 7%. In China, Starbucks’ second-largest market, same-store sales tumbled 14% as both average ticket and transactions shrank.

Starbucks has faced stiffer competition in China from local coffee shops that undercut the coffee giant on price. But there are encouraging signs in the country, too. Average daily transactions and weekly sales in China have improved sequentially quarter-over-quarter, according to Narasimhan.

The company is in the “early stages” of exploring strategic partnerships to accelerate its growth in China, Narasimhan said. It’s unclear what kind of shape that partnership could take.

Starbucks opened 526 net new stores in the fiscal quarter.

The company reiterated the outlook it provided last quarter. The company projects revenue growth of a low single-digit percentage and earnings per share growth in a range of flat to a low single-digit percentage.

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Science & Environment

Activist Elliott reportedly has a significant stake in Starbucks,…

19 July 2024
by admin

A Starbucks coffee shop in Amsterdam.

Nicolas Economou | Nurphoto | Getty Images

Elliott Management has taken a significant stake in coffee chain Starbucks and is engaging with management to find ways to improve the company’s share price, the Wall Street Journal reported Friday, citing people familiar with the matter.

Representatives for Elliott declined to comment. The firm did not hold a Starbucks stake as of March 31, its most recent disclosure.

A Starbucks spokesperson said the company does not comment on rumors and speculation. Starbucks shares jumped more than 6% Friday.

Elliott is one of the most prolific activist investors and one of the largest hedge funds in the world. The firm has taken up a number of sizable positions in recent months, including stakes at Southwest, SoftBank, Johnson Controls and Texas Instruments.

The Journal could not learn the size of Elliott’s position nor its specific demands, but noted it was possible a settlement could be reached.

Starbucks contended with an activist effort from its own workers unions earlier this year. That effort, off the back of an organization effort that began in 2021, ended with the Strategic Organizing Center withdrawing its candidates. Conversations between management and labor are ongoing.

Starbucks has been facing challenges for several quarters and has undergone a series of leadership changes in recent years. In April, the company reported disappointing quarterly results, with U.S. same-store sales falling 3% and traffic dropping 7%. The coffee chain also cut its 2024 outlook.

Starbucks reported rates of incomplete mobile app orders in the mid-teens and said occasional customers came in less often.

CEO Laxman Narasimhan, now under heightened pressure, has mentioned the need to make improvements to stores.

Narasimhan was hand-picked by returnee Starbucks CEO Howard Schultz to lead the company after his prior successor, Kevin Johnson, stepped down. Schultz recently weighed in on Starbuck’s challenges, but has said he does not plan to return as CEO for a fourth stint.

— CNBC’s Amelia Lucas contributed to this report.

Activist Elliott reportedly takes sizable stake in Starbucks

Correction: This story has been updated to correct the Strategic Organizing Center withdrew its candidates for the Starbucks board of directors. A previous version mischaracterized the events.