Wall Street was abuzz Thursday over a possible merger that would amount to more than a hill of beans.
Starbucks said it was focused on its turnaround plan, following a Financial Times report that the coffee chain was exploring a potential deal to buy Chipotle Mexican Grill.
“Our team is focused on executing our Back to Starbucks strategy,” Starbucks said in a statement. “We benefit from strong momentum and are confident in our long-term growth potential. »
The company added that it does not generally comment on what it describes as “rumors and speculation” and looks forward to sharing its next results later in October.
Starbucks’ comment comes after the FT reported that Starbucks had hired advisers in recent months to work on a proposed takeover of Chipotle. NBC News has not confirmed the information.
A tie-up between the two companies would bring massive upheaval to the restaurant industry, which is grappling with consumers changing their spending and eating habits.
Before the release of the report, which sent Chipotle shares up 6.2%, the company had a total market value of about $39 billion. For comparison, Starbucks’ market value is over $105 billion.
Chipotle did not respond to a request for comment Thursday afternoon.
A deal between the two companies would also reunite CEO Brian Niccol with the company he led before joining Starbucks in 2024.
Investors, however, seemed concerned that a deal could be a distraction for Niccol and his company. Shares of Starbucks fell 6.6% on Thursday, but ended the day slightly lower.
The company is in the midst of a massive turnaround plan designed by Niccol, including an overhaul of Starbucks stores, new service standards to speed up customer orders, a refreshed menu and a reboot of its rewards program.
Just weeks ago, Niccol touted the plan’s results, saying “tremendous progress” had been made. Shareholders have also seen promising returns. For the year, Starbucks shares are up nearly 11%.
This closely tracks the S&P 500’s 13% return so far this year. The company also significantly outperformed the S&P 500’s consumer discretionary sector’s negative 6.7% return this year.
Chipotle shares have fallen more than 11% this year and more than 20% over the past 12 months.
In July, the company’s latest financial results beat expectations, but that followed a period of slowing traffic and rising prices. These results were also accompanied by a surge in gas prices for consumers.
“We are seeing encouraging progress because we are focused on the right growth drivers,” Chipotle CEO Scott Boatwright said in a statement in July. Like Starbucks, Chipotle also revamped its rewards program and changed its menu to attract customers again.
Chipotle has also begun expanding outside the United States, with plans to open stores in Mexico, South Korea and Saudi Arabia.
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