There are many reasons to own a stock, and the CEO is one of them. The right CEO can be the defining factor in a company’s success, shaping operations, driving growth, and delivering substantial shareholder returns. Strong leadership often signals not just steady performance but transformative potential.
Brian Niccol and Laura Alber are prime examples of how executive vision can create lasting value. Their track records at Chipotle Mexican Grill (NYSE: CMG) and Williams-Sonoma (NYSE: WSM) underscore why investing in companies led by exceptional leaders is a strategy for long-term success. These two CEOs have demonstrated their ability to innovate, expand, and enhance profitability, making the companies they lead highly attractive investments.
Brian Niccol: Moves to Starbucks After Doubling Chipotle’s Revenue
Brian Niccol took over as CEO of Chipotle Mexican Grill in 2018 and doubled the business during his tenure. Given the outlook for domestic and international expansion, the company is on track to double its operations again within the next five to ten years. It may even double a third time over the longer term. Niccol also widened the margin, growing profits nearly 7x as scale and efficiency combined to lever results.
Niccol's leadership style emphasizes brand strength, quality, and operational flow-through. At Chipotle, he harnessed digital innovations, such as introducing Chipotlanes, which are app-only drive-thrus designed to enhance efficiency during peak times. These lanes improved customer flow, reduced strain on frontline staff, and increased margins by lowering costs. Additionally, Niccol championed the adoption of operational technologies, such as specialized kitchen tools, to save time and improve productivity.
Now at Starbucks (NASDAQ: SBUX), a much larger company than Chipotle, Niccol is expected to drive similar transformational changes. Starbucks aims to return to its coffeehouse roots by creating more comfortable spaces for customers to meet and enjoy their favorite brews. Niccol plans to address staffing and other ways to improve operational quality, especially during peak times.
Niccol’s proven ability to enhance financial performance is evident in Chipotle’s success. His initiatives improved cash flow and profitability, enabling investments in growth, maintaining a strong balance sheet, and executing incremental share buybacks that boosted investor value.
Starbucks is in good shape and expected to improve its financial condition over the years with Niccol in charge.
Laura Alber: Building Shareholder Value at Williams-Sonoma
Since taking control of Williams-Sonoma in 2010, Laura Alber has doubled the business, which includes brands like Williams Sonoma, Williams Sonoma Home, Pottery Barn, Pottery Barn Kids, PBteen, West Elm, Mark and Graham, and Rejuvenation.
Alber's efforts include improving brand recognition and loyalty and expanding into new markets and categories. Pottery Barn Kids is now a critical business segment underpinning results in 2024. The latest initiatives have expanded the system-wide margin despite a contraction in the core business due to post-pandemic market normalization and macroeconomic headwinds. The company is expected to revert to growth soon and sustain a growth trajectory over the long term.
The margin improvement underscores why you should buy stock in whatever company Laura Alber is running. Williams-Sonoma’s margin is trending at the high end of the long-term target in 2024, with no signs of contracting soon. The margin provides a robust cash flow that she and the board use to sustain growth investments, a healthy balance sheet, and capital returns, including dividends and buybacks. Share buybacks reduced the count by 2% year-over-year in Q3 and 1.2% year-to-date and are expected to continue at a robust pace in 2025.
