Chipotle stock falls more than 7% after CEO departs for Starbucks

Chipotle stock (CMG) fell more than 7% Tuesday after the company announced the departure of its CEO, Brian Niccol, who will take the same role at Starbucks (SBUX) starting next month.

Niccol has been the CEO of Chipotle since 2018. Scott Boatwright, its COO, will serve as the company’s interim CEO.

Niccol has been integral to Chipotle’s rebound over the past several years as the company recovered from an E. coli crisis that began in 2015 and weighed on shares for years.

In the year before Niccol joined the company, Chipotle’s annual revenues were around $4.5 billion; by 2023, revenue had more than doubled, totaling $9.9 billion for the year. In the past five years, the stock has rallied more than 240% against an 85% gain for the S&P 500.

Amid the executive shake-up, Chipotle CFO Jack Hartung, who had announced plans to retire in 2025, has agreed to remain with Chiptole “indefinitely” as a president of strategy, finance, and supply chain.

“Chipotle is in a very good place,” Wedbush analyst Nick Setyan told Yahoo Finance. “They’re in very good hands … Both gentlemen here that are taking over, I credit both of them with the turnaround as much as I credit Brian Niccol. So I think they’re in very good hands.”

He added, “They’re on autopilot, frankly. And not much has to change.”

Bernstein senior research analyst Danilo Gargiulo agreed Chipotle is well positioned for the change.

“The brand has evolved itself from being just a CEO-driven and CEO-led,” Gargiulo said. “And I think over time it has proven itself that it’s larger than its own management … Right now we are talking about potentially a cookie cutter approach that Chipotle will need to be deploying into more areas and expand the number of units.”