Starbucks is reportedly eyeing a Chipotle acquisition

Related: Fat Brands changes its name The common thread between the two chains is Brian Niccol, who left Chipotle two years ago to take the helm at Starbucks. Since then, the coffee shop chain’s stock has risen 21.5% through closing on Wednesday. Chipotle has gone in the other direction, however, with its shares down 45% through Wednesday.

The fast-casual burrito chain’s same-store sales over that period has slowed. Same-store sales have been no higher than 2.2% in each of the past six periods, half of which were negative. Its weak share price has led to frustration among investors and some expectation that the company could attract activist investor pressure , particularly if things didn’t turn around quickly.

Niccol helped turn the brand around after his arrival from Taco Bell in 2018, and his potential return as a buyer could be viewed as a positive for the chain. The benefits are less clear for Starbucks, or even a combined company. “The strategic rationale for [Starbucks] acquiring [Chipotle] isn’t apparent to us given limited overlap between the businesses,” Logan Reich, analyst with RBC, said in a note.

The two brands have different supply chains. Swallowing Chipotle would also cost Starbucks a lot of money, likely in the form of debt. Sharon Zackfia, analyst with William Blair, speculated that a sale of Starbucks Japan could help the coffee shop chain pay for the burrito brand.

She also noted that such a deal could signal “that management has less confidence in Starbucks’ future growth prospects.” It would also come just as Starbucks shows some real momentum following two years of sales weakness. Same-store sales at the chain have improved in each of the past four quarters in the U.S., including 7.9% last quarter.

Related: 7 Brew is paying $143M for 73 closed Salad and Go sites The company overhauled management and restructured its business, closed locations, added workers to its coffee shops, started remodeling stores and upgraded the technology to reduce backups. All of that contributed to sales and traffic improvement under Niccol’s “Back to Starbucks” plan.

But the company also demonstrated that it has more work to do after it just closed another 250 coffee shops. About the Author Editor in Chief, Restaurant Business Restaurant Business Editor-in-Chief Jonathan Maze is a longtime industry journalist who writes about restaurant finance, mergers and acquisitions and the economy, with a particular focus on quick-service restaurants.

He writes daily about the factors influencing the operating environment, including labor and food costs and various industry trends such as technology and delivery. Jonathan has been widely quoted in media publications such as the New York Times and the Washington Post and has appeared on CNBC, Yahoo Finance and NPR.

He writes a weekly finance-focused newsletter for Restaurant Business , The Bottom Line , and is the host of the weekly podcast “ A Deeper Dive .”