Starbucks has announced that it will replace CEO Laxman Narasimhan with Brian Niccol, the current chairman and CEO of Chipotle, starting September 9.

Narasimhan will step down immediately, the company said in a statement on Tuesday.

This change comes as Starbucks faces a second consecutive quarter of declining sales, with reduced demand in its key markets of the US and China.

For the April-June period of 2024, North American store sales fell by 2 percent, and US store sales decreased by the same margin.

The US and China together made up 61 percent of Starbucks' global portfolio.

The company's North American revenue grew only 1percent, while international revenue dropped nearly 7 percent to $1.84 billion from $1.97 billion year-over-year.

Despite these challenges, Starbucks’ shares were up approximately 21.4 percent on the Nasdaq following the CEO announcement.

Negative impact from boycott due to its support for Israel

Starbucks has also suffered from a boycott linked to its support for Israel. as Tel Aviv continues its brutal war on Gaza, which has negatively impacted its financial performance.

The coffee giant, facing backlash and boycott campaigns in response to Israel's actions in Gaza, reported a 2 percent revenue decline in the January-March period, with global sales falling by 4 percent, and a 0.6 percent revenue drop with a 3 percent decrease in global sales in the subsequent quarter.

Before joining Chipotle, Niccol was CEO of Taco Bell and held leadership roles at Pizza Hut, both part of Yum! Brands.

He also serves on Walmart's board of directors.