Chipotle shares fell as much as 10% on Tuesday when the company announced that CEO Brian Niccol would step down on Aug. 31 to become CEO of StarbucksShares closed down 7% for the day.
Niccol began as Chipotle's CEO in March 2018. Chipotle's stock has risen more than 770% since he took over.
Chipotle’s board of directors named Chief Operating Officer Scott Boatwright as interim CEO. He has been with the company since 2017. The board also announced that Chief Financial Officer Jack Hartung, who had announced his intention to retire, would remain with the company indefinitely and help with the transition.
“What we saw in Brian was someone who, honestly, has been through all kinds of market environments, all kinds of cycles,” Mellody Hobson, who was Starbucks' board chair but stepped down to become lead independent director as part of Tuesday's changes, said on CNBC's “Squawk Box.” “When I talked to him, I remember him saying, 'I know what to do.'”
Chipotle has seen strong growth in same-store sales and traffic, while other restaurants have reported that consumers are cutting back on customer spending.
Chipotle reported in July that its second-quarter earnings beat analysts' estimates, with revenue of $2.97 billion. Net sales rose 18.2% during the quarter, and same-store sales rose 11.1%.
Niccol helped lead Chipotle through a foodborne illness scandal and oversaw the restaurant chain during the pandemic.
Prior to taking over at Chipotle, Niccol served as CEO of Yum Brands' Taco Bell.
Analyst Mark Kalinowski, managing director of Kalinowski Equity Research, struck a cautious tone about the CEO change.
“While this will be seen as a bad thing for Chipotle in the short term, Mr. Niccol was CEO there for more than six years, so perhaps the opportunity to bring new ideas to such a well-respected company isn't the worst thing in the world in the long term,” Kalinowski wrote in a note Tuesday.
—CNBC's Amelia Lucas and Robert Hum contributed to this report.
