Starbucks CEO is replaced by Brian Niccol, who stepped in at Chipotle when the chain was in distress

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Starbucks, struggling with weak demand and disgruntled investors, said Tuesday that CEO Laxman Narasimhan is stepping down after a little more than a year in the job

Starbucks, struggling with fading sales and disgruntled investors, said Tuesday it's replacing CEO Laxman Narasimhan with Brian Niccol, the chairman and CEO of Chipotle.

Narasimhan, who spent a little more than a year leading Starbucks, will step down immediately, the Seattle coffee giant said. Niccol will become Starbucks' chairman and CEO on Sept. 9. Chief Financial Officer Rachel Ruggeri will serve as interim CEO until that time.

Shares of Starbucks Corp. soared more than 21% in early trading Tuesday.

Narasimhan, a longtime PepsiCo executive who has also served as the CEO of Reckitt, a U.K. 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 and the company board quickly soured on Narasimhan as sales weakened and Starbucks dealt with multiple issues, including inroads by lower-cost competitors in China and boycotts in the Middle East and elsewhere related to the Israel-Hamas war.

Starbucks' revenue dropped 2% in the first three months of this year, the first quarterly sales decline for the company since the end of 2020. The decline prompted a rebuke from Schultz, Starbucks' founder and Chairman Emeritus, who wrote in a LinkedIn post this spring that company leaders should spend more time in stores and focus on coffee drinks to turn around flagging sales.

Revenue fell again the next quarter. A new summer drink with boba-like raspberry “pearls” drove strong U.S. sales, but the