Say what you want about the tasty warmth of its fresh-from-the-fryers glazed confections, Krispy Kreme Doughnuts (NYSE: KKD) hasn't been leading the sweet life of late. Beleaguered and beaten down in the midst of what CNN Money calls a "sputtering turnaround effort," the company remains challenged with an anemic share price, struggling sales, and folding franchise locations.

Today, Chief Executive Daryl Brewster, who took the reins in March 2006, announced plans to retire for personal reasons. Brewster will leave his post at the end of this month. The board quickly named James Morgan, board member since 2000 and chairman of the board since 2005, to take the vacated seat.

In other news, Krispy Kreme has followed the lead of many fast-food concerns to announce that all products sold in the U.S. are now free of trans fats. KKD officials said it has been introducing zero-grams trans fat products across the country during the past several months.

Investors are cheering this combination of news, as the stock has spiked 9.5% in today's trading. Of course, given the stock's current price (around the $3 level), this represents an absolute increase of 27 cents per share.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

On May 26, 2006, I blogged about the decline of what was once a solid brand -- Krispy Kreme Doughnuts (NYSE:KKD). At the time, I said it was full of holes -- closing stores, franchisees bankrupted, a government investigation starting. But I also pointed to the new CEO, Daryl Brewster, who analysts were hoping might revitalize the company. KKD was $10 a share then. Today, nearly a year later, it is still floundering at nearly the same price.

In The Business Journal earlier this month, Brewster was reported as saying, "We kind of call it going from survival mode, which we were clearly in a year ago, to stability, which we think we're approaching .... But at the same time, (we're) really building and driving toward sustained growth as we go forward."

Out of survival mode, maybe, but out of the weeds? I'm not so sure. That said, Krispy Kreme is trying -- in February, it announced a new whole wheat donut. (I'd argue that if you're buying a donut, you aren't really thinking about health foods to begin with, so this is pretty misguided product development!) It is expanding through franchises abroad and designing cheaper, smaller stores. It has recently refinanced its debt as part of an overall cost-cutting mission, and it's resolved most of its accounting and legal problems.

Wall Street analysts are not walking away yet -- many of them see ongoing hope under Brewster. I still don't see too much hope in Krispy Kreme though -- there's simply too much competition with places like Dunkin' Donuts, and what had made KKD unique was its boutique, hard-to-find feel -- which was long ago destroyed. In fact, Dunkin' Doughnuts has hired Rachel Ray, the "hip" celebrity chef, to appear in ads for Dunkin' Doughnuts and the chain is making a concerted effort to grow its appeal with a fresher look. All of this will make it harder for Krispy Kreme to make a comeback.