Starbucks Co-founder Howard Schultz will step down as CEO to focus on new high-end coffee shops, handing the top job to Chief Operating Officer Kevin Johnson, a long-time technology executive.
Mr Schultz, who will become executive chairman in April 2017, said he would focus on building ultra-premium reserve stores and showcase roastery and tasting rooms around the world as well as setting the brand's "social impact agenda" that includes sending employees to college and recruiting veterans.
Starbucks had signalled the change in July, but its shares fell 3.6% to $56.41 in extended trading yesterday, as investors recalled the company's decline after Mr Schultz handed over the reins in 2000. He returned in 2008.
"Having him step down as CEO raised the anxiety level," said Stephens analyst Will Slabaugh, who said that Mr Schultz is the heart and soul of the brand, its entrepreneurial leader and its saviour.
"We're in a much better position on every level," said Mr Schultz, who returned for his second stint as CEO in the depths of the "Great Recession," when Starbucks' stock was trading below $10.
Late last year, it hit an all-time high above $60.
Mr Schultz has put Starbucks in the national spotlight, asking customers not to bring guns into stores and urging conversations on race relations.
Many of the campaigns have generated controversy, but analysts have not seen a hit to financial results and the efforts have raised the profile of the coffee company and cemented his status as a national figure.
"The idea that he's replaceable, I think that's erroneous," said Bill Smead, CEO of Smead Capital Management in Seattle, which owns Starbucks shares.
He compared the change to the retirement of long-time McDonald's CEO Ray Kroc, who turned a handful of hamburger stands into the world's biggest restaurant company.
The announcement also came as investors worry about the restaurant industry's stubborn traffic declines. Starbucks has held up better than most, but it has not been immune.
Kevin Johnson is a former technology executive who became President and COO at Starbucks in March 2015.
He has been on the Starbucks board since 2009 but most of his career was in the technology industry.
He was the chief executive of Juniper Networks from September 2008 to January 2014 and prior to that held several senior positions at Microsoft.
On a conference call after the announcement, analysts pressed the company on timing and whether, with Mr Schultz stepping aside, senior management still had the "merchant gene."
"Not having retail experience could be a problem over time," said Howard Penney, an analyst at Hedgeye Risk Management.
