In a major shakeup, Starbucks Corporation has announced the appointment of Brian Niccol, currently the CEO of Chipotle Mexican Grill, as its new chairman and chief executive officer, effective September 9, 2024.

Niccol will succeed Laxman Narasimhan, who is stepping down immediately from the position that he has held since 2022, with CFO Rachel Ruggeri serving as interim CEO.

Starbucks shares rose more than 13% in premarket trading Tuesday following the news. Chipotle stock, meanwhile, was down more than 7%.

A troubled tenure for Narasimhan

Last spring, Laxman Narasimhan’s tenure as CEO of Starbucks appeared to have hit a rough patch, as the company cut its annual guidance for the third consecutive quarter following its worst performance since the pandemic.

Each geographic segment, including the crucial Chinese market, saw declines, with comparable sales in China dropping 11%.

Starbucks slashed its full-year revenue growth forecast to a low-single-digit percentage, causing shares to plummet by as much as 16%, the steepest decline since March 2020. The disappointing results cast doubt on Narasimhan’s ability to revive customer demand and reassure investors—including former CEO Howard Schultz—that his strategy can address potential deeper issues like overpricing and waning brand appeal.

Last week, the Wall Street Journal reported that activist investor Starboard Value has taken a stake in Starbucks. The company had already been negotiating with activist investor Elliott Management.

Fast Company recached out to Starbucks for additional comment.

Niccol is a restaurant industry veteran

Niccol’s career includes leadership roles at Taco Bell, Pizza Hut, and Procter & Gamble before joining Chipotle in 2018. At Chipotle, Niccol oversaw significant revenue growth. Last July, the company reported stronger-than-expected second-quarter results, with revenue rising 18.2% year-over-year to $2.97 billion and net income reaching $455.67 million.

“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” said Mellody Hobson, Starbucks’s board chair.