Chipotle shares fell more than 10% Tuesday after the company announced that CEO Brian Niccol will step down on Aug. 31 to become CEO of Starbucks.
Niccol took over as CEO of Chipotle in March 2018. Chipotle shares have risen more than 770% since he took over.
Chipotle’s board of directors has named Scott Boatwright, chief operating officer, as interim CEO. He has been with the company since 2017. The board also announced that Chief Financial Officer Jack Hartung, who announced his intention to retire, will remain with the company indefinitely and assist with the transition.
“What we saw with Brian is someone who, quite frankly, has been through this — through all sorts of market environments, all sorts of cycles,” Mellody Hobson, who was Starbucks’s chairman but resigned to become a lead independent director as part of the changes Tuesday, said on CNBC’s “Squawk Box.” “When I spoke to him I remember him saying, ‘I know what to do.’”
Chipotle saw strong growth in same-store sales and traffic while other restaurants reported that consumers were pulling back on customer spending.
Chipotle reported second-quarter earnings in July that beat analysts’ estimates, with revenue of $2.97 billion. Net sales rose 18.2% during the quarter, with same-store sales up 11.1%.
Nicole helped steer Chipotle through the foodborne illness scandal and has overseen the restaurant chain during the pandemic.
Prior to his role at Chipotle, Nichol was CEO of Yum Brands' Taco Bell.
Analyst Mark Kalinowski, CEO of Kalinowski Equity Research, sounded a cautious note about the CEO change.
“While this will be seen as bad for Chipotle in the short term, Mr. Niccol has been CEO there for over six years, so the opportunity to inject some fresh thinking into this highly respected company may not be the worst thing in the world in the long term,” Kalinowski wrote in a note Tuesday.
—CNBC's Amelia Lucas and Robert Home contributed to this report.
