--- title: "Is Hiring Chipotle CEO Brian Niccol a Good Move for Starbucks?" description: "Chipotle CEO Brian Niccol's move to Starbucks raises questions among investors. Niccol, known for revitalizing Chipotle, achieved significant revenue growth. Starbucks faces challenges with succession" type: "news" locale: "en" url: "https://longbridge.com/en/news/211848099.md" published_at: "2024-08-17T14:37:22.000Z" --- # Is Hiring Chipotle CEO Brian Niccol a Good Move for Starbucks? > Chipotle CEO Brian Niccol's move to Starbucks raises questions among investors. Niccol, known for revitalizing Chipotle, achieved significant revenue growth. Starbucks faces challenges with succession and declining sales, especially after an activist investor's stake purchase. Unlike Chipotle's growth focus, Starbucks seeks expansion in international markets and same-store sales. Niccol's track record suggests potential to improve Starbucks' fortunes, but success is uncertain given the company's maturity and operational differences. While he may enhance stock performance, Niccol must navigate unique challenges at Starbucks. The news that **Chipotle** (CMG -2.78%) CEO Brian Niccol has jumped ship to move to **Starbucks** (SBUX 0.53%) sent shock waves across the restaurant industry. Niccol has had a successful tenure at Chipotle with rapid expansion, revenue growth in the double digits, and procedural changes that addressed the setbacks that hurt Chipotle in previous years. However, Starbucks presents its own challenges. Howard Schultz has been Starbucks' only truly successful CEO, and the company has brought him back more than once because it failed to find an adequate replacement. Hence, the question for investors is whether this will be a move that will boost the coffee stock over time. ## Why Starbucks chose Brian Niccol The choice of Niccol was undoubtedly determined by his performance as Chipotle CEO. Since he took over in March 2018, the stock has risen by over 700%, almost six times the return the **S&P 500** delivered over the same timeframe. CMG data by YCharts. So successful were his efforts that Chipotle reported 7% revenue growth in 2020, a year when many restaurants experienced revenue declines of 100% amid the shutdowns. Moreover, after the pandemic lifted, double-digit revenue growth resumed. This part of Niccol's resume may have attracted Starbucks to him. In recent weeks, activist investor Elliott Management bought a substantial stake in Starbucks as a struggling economy led to declining same-store sales in the U.S. and China. Additionally, Niccol has proven himself in getting a company past operational struggles. Chipotle faced periodic E. coli and salmonella outbreaks between 2015 and 2018 before Niccol took over. Under Niccol, such outbreaks ended as he launched a food safety program, improved the company's food prep and handling, and incentivized sick workers to stay home. Starbucks also faces a problem that Niccol got Chipotle past -- moving on from the founder's leadership. Starbucks has struggled to find a successor to Howard Schultz, who founded the modern iteration of Starbucks. In the same way, Chipotle founder Steve Ellis had to return to the CEO position after it struggled to find a successor. It was only after Niccol took over that Ellis could leave the company for good. ## Niccol's new challenges Nonetheless, Starbucks will present Niccol with some unique challenges. For one, Chipotle and Starbucks are at different growth stages. Chipotle is in a growth-focused mode in the U.S. and operates mainly in that country. It is approximately halfway to the goal of 7,000 stores that it considers "saturation" in North America. Much of its revenue growth came from increasing the restaurant count by 8%, making double-digit revenue growth an easier goal to achieve. In contrast, Starbucks' U.S. market is close to saturation. Hence, it has turned to foreign markets, primarily China, to drive continued growth. Thus, Niccol will have to focus more on same-store sales growth and international expansion than he did at Chipotle to succeed at this job. Moreover, Starbucks sells more products in different venues. While transitioning from selling mostly food to primarily beverages may not be a problem, Niccol will have a more extensive product selection to manage between the drinks, desserts, and sandwiches Starbucks sells. Channel development, which consists of consumer products, made up about 5% of Starbucks' revenue in the third quarter of fiscal 2024 (ended June 30). While not a major revenue source, it is a different food-related business in which Niccol does not have extensive experience. ## Can Brian Niccol succeed at Starbucks? Although Niccol's success is not guaranteed, the move is one that will likely boost Starbucks' stock over time. Niccol has a proven track record of operational success under challenging circumstances. Also, given Starbucks' lack of success at finding a worthy successor to Howard Schultz, Niccol's ability to succeed Chipotle's founder without complications makes him a natural choice for this role. Admittedly, Niccol will have to rise to the challenge of deriving growth from a more mature business and will face some struggles that may be new to him. But if he can revive this more mature business, he stands a high probability of succeeding as Starbucks CEO. ### Related Stocks - [CMG.US - Chipotle Mexican Grill](https://longbridge.com/en/quote/CMG.US.md) - [SBUX.US - Starbucks](https://longbridge.com/en/quote/SBUX.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 星巴克股票（SBUX）因在虧損的印度加速門店擴張而失去光彩 | 星巴克（SBUX）股價下跌，因為該公司計劃在印度擴大門店佈局，儘管面臨重大虧損。與塔塔集團的合資企業塔塔星巴克計劃到 2028 年將門店數量從 504 家增加到 1,000 家，同時還將根據當地口味調整菜單。儘管收入同比增長了 7%，但虧損 | [Link](https://longbridge.com/en/news/276447322.md) | | 星巴克印度在虧損增加的情況下擴展門店網絡，並進行菜單本地化 | 星巴克印度擴展門店網絡，儘管虧損加劇仍本地化菜單 | [Link](https://longbridge.com/en/news/276449752.md) | | 對 Chipotle Mexican Grill Inc 市盈率的觀察 | 墨式燒烤公司（NYSE:CMG）目前的交易價格為 38.50 美元，下跌 2.66%。該股票在過去一個月內下跌了 7.03%，在過去一年內下跌了 26.83%。其市盈率為 33.96，低於行業平均水平 49.69，這表明可能被低估或增長預期 | [Link](https://longbridge.com/en/news/276365000.md) | | 丹尼爾·勒布的 Third Point 在第四季度的調整中增持了墨式燒烤、Constellation Energy 和阿里巴巴，同時大幅削減了台積電和亞馬遜的持倉 | 對沖基金億萬富翁丹尼爾·洛布的 Third Point LLC 在第四季度進行了重大調整，新增加了對 Chipotle、Constellation Energy 和阿里巴巴的投資，同時減少了對亞馬遜、微軟和台灣半導體的持股。該基金的新投資包 | [Link](https://longbridge.com/en/news/276211755.md) | | Feed the Children 通過星巴克 FoodShare 能力建設資助加強了飢餓救濟工作 | Feed the Children 獲得了星巴克食品分享能力建設贈款，以增強其運輸和物流能力，以便向面臨飢餓的家庭分發食品。該贈款標誌着星巴克食品分享成立十週年，將幫助改善該組織高效運輸食品的能力，包括購買必要的設備。自 2016 年以來， | [Link](https://longbridge.com/en/news/276477527.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.