Starbucks hands the reins to new CEO Laxman Narasimhan earlier than expected
Yahoo Finance Live anchors discuss the change in leadership at Starbucks as Laxman Narasimhan takes over as CEO from Howard Schultz.
DAVE BRIGGS: My play is Starbucks-- the coffee giant's new CEO Laxman Narasimhan taking over for Howard Schultz about two weeks sooner than originally planned. Narasimhan was named the incoming CEO back in October of last year and has since shadowed Schultz, who stepped into the CEO role for the third and, he says, final time in April. The handoff was slated for April 1st. In addition to taking over as CEO, Narasimhan joined the board on Monday. He will lead the company's annual shareholder meeting on Thursday.
Schultz, for his part, is set to testify before the Senate on March 29th regarding Starbucks' ongoing unionization effort, which should be very interesting. I was trying to think if shares were a coffee drink, they're kind of a flat white, if you will, today. Also this year, not a whole lot of movement in 2023, a solid year last year. The big question for the new CEO will be what Howard Schultz is testifying on, and it's that ongoing unionization effort and how they handle it. He clearly did his best to squash.
SEANA SMITH: Yeah, he did his best to squash it. Bernie Sanders, Senator Bernie Sanders very excited that Howard Schultz would actually agree to come down and testify later this month. It will be interesting just if we get any insight-- I doubt it because Howard Schultz is a pro at this, but any insight into how Starbucks has handled these unionization efforts because you're right. The response from a lot of those employees that have tried to unionize has been extremely critical of the coffee giant.
So this new CEO coming in also has his work cut out for him just in terms of helping grow the culture of the company and help resolve so many of these issues that I think has been holding back Starbucks for quite some time. And you look at the underperformance also of the stock recently, going back to last year, the worst year that it has had since 2008. So it does need something that's really going to boost the performance here going forward. And maybe getting more employees on board might do it.
JOSH SCHAFER: You don't think it's going to be olive oil and coffee?
SEANA SMITH: I don't think it's going to be olive oil and coffee.
DAVE BRIGGS: Oleato!
JOSH SCHAFER: He thinks it's going to be olive oil and coffee.
DAVE BRIGGS: Oleato!
SEANA SMITH: A big sense of adventure there.
DAVE BRIGGS: I think Howard Schultz--
SEANA SMITH: You gotta try it.
DAVE BRIGGS: --is leaving a bomb for his replacement, I think. That is a tough pill when you're an incoming CEO who he must have been on board with the olive oil drinks, but it was clearly a Schultz plan.
JOSH SCHAFER: You're excited to see, though, what else you learn from Thursday, right, at that investor day, sort of, what is the grand plan here because, I mean, we're joking about olive oil and coffee, but if that's really as far as you can go-- they've innovated a lot with products at this point. What new innovation can you bring? Is it something new with food? What can you bring that brings in more customers and gets more from our wallets? I don't think it is olive oil.
SEANA SMITH: I don't know.
JOSH SCHAFER: So can you do something different? Is it more rewards? You know, where do you get that next leg?
SEANA SMITH: I bet you it's going to taste better than we think it's going to.
JOSH SCHAFER: I would agree with that.
SEANA SMITH: I wouldn't say it's going to be great.
DAVE BRIGGS: We're going to try it here this week with our barista here at Yahoo. And we'll get our own little sample. We do know they're doing a little bit of a reorg in stores to make the employee process a little more efficient. Is that a big investor story? I can't imagine that it is. We shall see. It'll be an interesting investor day.