New Starbucks CEO has exactly the kind of consumer experience the coffee chain needs

Published Thu, Sep 1 20225:02 PM EDTUpdated Thu, Sep 1 20225:10 PM EDT

Starbucks (SBUX) announced late Thursday that Laxman Narasimhan will become the company's next chief executive officer and a member of the Starbucks board of directors. Before assuming the CEO role in April 2023, Narasimhan will join Starbucks in October and work closely with interim chief Howard Schultz. It was announced earlier Thursday that Narasimhan will step down at the end of the month as CEO of Reckitt Benckiser , the consumer-packaged goods company known for its health, hygiene and nutrition products. We think this is a fantastic hire by Starbucks. As much as we admired former CEO Kevin Johnson, his background was in technology and what Starbucks needed more was a leader who knows how to manage iconic consumer brands. Narasimhan brings that to the table with his nearly 30 years of experience leading and advising global consumer-facing brands. Before his time at Reckitt, Narasimhan held various leadership roles at PepsiCo (PEP), including global chief commerce office. He was also formerly a senior partner at McKinsey & Company where he focused on its consumer, retail and technology practices in the U.S., Asia and India. Narasimhan also has a strong track record of performance. In Reckitt Benckiser's first half of 2022, the company delivered 8.6% net revenue growth — thanks to prudent pricing, volume growth, mix improvement, and higher than planned productivity. In addition to those strong revenue figures, the company's adjusted operating margin expanded 290 basis points — due to an improved mix but also a productivity program that performed above-planned expectations. This degree of margin expansion is even more impressive when you remember it occurred during a time of rampant inflation. Putting it all together, we see this hire as a win for Starbucks and its shareholders. We look forward to hearing more about the company's future plans at the Investor Meeting Sept. 13 . We added Starbucks to Jim Cramer's Charitable Trust on Aug. 22 , calling it up from our Bullpen watch list. Since then we've been scaling our position with a number of buys, including the most recent one on Tuesday. (Jim Cramer's Charitable Trust is long SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Starbucks coffee shop logo seen at one of their stores.

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