the jury is out
How difficult was it to find a CEO that would conform to what Howard wanted? The SBUX press release overstates the new CEO's success at RKT.LN. In three years, he did not fix RKT.LN, but is he the right man for the SBUX job?
Time will tell if Laxman Narasimhan is the right choice as CEO of SBUX. If we use the performance of (RKT.LN) while CEO as a proxy, the jury is still out. Laxman was appointed CEO of RKT.LN on September 1, 2019, the stock has underperformed the FTSE since then. From the RKT website - "Under Laxman's leadership, Reckitt's purpose is to protect, heal and nurture in a relentless pursuit of a cleaner, healthier world. Reckitt fights to make access to the highest-quality hygiene, wellness and nourishment a right, not a privilege, for everyone." That sounds like the reason why SBUX is hiring him! "His understanding of our culture and values, coupled with his expertise as a brand builder, innovation champion, and operational leader, will be true differentiators as we position Starbucks for the next 50 years, generating value for all our stakeholders."
The SBUX press release said, "he led the company (RKT.LN) through a major strategic transformation and a return to sustainable growth." However, RKT.LN still operates with a relatively weak balance sheet and is still haunted by execution problems and previous managerial missteps. After three years as CEO, RKT is still in turnaround mode and lacks tangible evidence of a successful turnaround. The Factset estimates have only one of the three company divisions posting revenue growth in FY22. Also, Bloomberg reported back in June 2022 that the company is deciding "whether to shelve the sale of its infant formula unit." With this as a backdrop, it's no wonder he wanted to leave RKT.LN and return to the USA.
Have a great weekend!
