CKE Restaurants (NYSE:CKR) seems to think that consumers can't get enough hamburger, and so far it has been right. However, its Hardee's chain may be reaching the point where it's saturating the market with red meat.
On Monday, the fast-food restaurant outfit's Hardee's restaurants unveiled their new "Monster Thickburger." The new entree is composed of two 1/3-pound patties, four pieces of bacon, and American cheese served on a sesame seed bun, all of which adds up to 1,420 calories and 102 grams of fat, according to The Associated Press.
There is no doubt that Hardee's has enjoyed some real success with its Thickburger line. CKE has to be applauded for going against the grain, for, even as market leader McDonald's (NYSE:MCD) was introducing healthier fare, Hardee's was concentrating on bigger portions of meat. In addition to size, though, Thickburgers also offer something in the way of improved taste and quality, as each patty is 100% Angus beef. The fast food chain has been charging a premium for these items, and so far, people have been paying up.
Thanks to this focus on size and quality, CKE's stock has been on a roll. While the company failed to deliver a profit in its latest quarter in part because of a lawsuit settlement and debt restructuring, the four weeks ended Nov. 1 marked the 17th consecutive period in which same-store sales increased at both Hardee's and Carl's Jr.
Still, Fool contributor W.D. Crotty recently raised some concern about CKE's premium stock price, and his apprehension may be warranted. To date, consumers have responded enthusiastically to bigger, tastier burgers. But CKE may be running out of tricks: The Monster Thickburger doesn't represent anything terribly new in terms of quality or ingredients. What's more, the new item is priced at $5.49, a level comparable to the cost of a burger at full-service restaurants. In light of these factors, CKE may be in danger of discovering that bigger is not necessarily better.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
