Denny’s shares rise 3% on CEO change

Denny’s Corp. shares rose 3.4% on Wednesday after the restaurant chain replaced Chief Executive Nelson Marchioli.

Debra Smithart-Oglesby, chairwoman of the board since 2006 and a director since 2003, was named interim CEO until a new CEO is hired, the Spartanburg, S.C., company said.

Sales at Denny’s franchises open at least a year have decreased for the last nine quarters. A dissident group of investors attempted this year to oust Marchioli from the board by nominating new directors. On May 19, the day the dissidents’ nominees lost the vote, Denny’s shares fell 13%.

“It shows that change was needed. The question is, is Debra the right person, or not?” said Patrick Walsh, a partner at Oak Street Capital Management, one of the dissident investors. “They need to figure out a way to profitably increase guest traffic.”

Denny’s shares gained 9 cents to $2.74.

The company also announced the creation of a strategic team during the transition period. It will include Mark Wolfinger, Denny’s chief financial officer, as well as Bill Cox and Bob Langford, two Denny’s franchisees.