Appointment of new CEO
On February 13, 2018, Chipotle Mexican Grill (CMG) announced that it has appointed Brian Niccol, current CEO (chief executive officer) of Yum! Brands’ (YUM) Taco Bell, as its new CEO. On March 5, 2018, Niccol will replace Steve Ells, the founder of Chipotle.
The announcement appears to have increased investor confidence since Chipotle stock rose 11.7% to $280.77 in after-hours trading on February 13, 2018. Niccol joined Taco Bell in 2011 as chief marketing and innovation officer and became president of the brand in 2013. In January 2015, he was appointed CEO. He was instrumental in launching the chain’s breakfast offerings and implementing mobile ordering and payment across 7,000 restaurants in the United States. Under his leadership, Taco Bell posted SSSG (same-store sales growth) of 2% and 4% in 2016 and 2017, respectively.
In Chipotle’s announcement, Ells said, “Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business. His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant.”
Since the beginning of 2018, Chipotle stock has fallen 13%. In 2017, the stock fell 23.4%. The company has been struggling to come out of the food safety issues that first struck the company in October 2015. Chipotle’s peers Shake Shack (SHAK) and Yum! Brands have fallen 11.6% and 4.7%, respectively, year-to-date. For the broader comparative indexes, the S&P 500 Index (SPX-INDEX) and the Consumer Discretionary Select Sector SPDR ETF (XLY) have returned 18.9% and 4.1%, respectively. XLY has invested 9.9% of its holdings in restaurant and travel companies.