Starbucks replaces CEO Laxman Narasimhan with Chipotle CEO Brian Niccol

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.