CKE Restaurants (NYSE:CKR) is known for defying convention and grabbing headlines as a result. While rivals like McDonald's (NYSE:MCD) and Wendy's (NYSE:WEN) have been pushing salads, CKE's Hardee's chain has rolled out Thickburgers, bigger and better versions of the classic hamburger. To date, the strategy has proven quite successful. This past year marked the company's first annual profit since 1999, and CKE's stock is up almost 77% from May 2004.
Now, CKE has evidently decided that its marketing should also reflect a rebel attitude. The company announced last week that Paris Hilton would be featured in an ad promoting the Spicy BBQ Six Dollar Burger, a new menu item at its Carl's Jr. chain. Once again, CKE is going to get people's attention because the spot, at least as it's featured on the Internet, is pretty close to pornography. Hilton, dressed in a few strips of leather, soaps herself and a Bentley down, and in the process tries to eat the huge burger. The ad is supposed to be sexy, but comes off as more than a little bizarre.
CKE's attempt to push the envelope with its advertising is probably not an accident. After growing at a breathtaking pace for several months, same-store sales comparisons are getting a lot harder. To keep its momentum going, the company desperately needs to grab potential customers' attention, and the new ad may be a reflection of this fact.
Still, investors shouldn't let themselves get distracted by Paris Hilton. The fast-food firm reported earlier this month that April same-store sales at Carl's Jr. rose 1.7% while Hardee's sales fell 1.7%. What's more, CKE is predicting that competitors' discounting will put added pressure on same-store sales in the near term. With or without Paris Hilton, CKE will have a tough time maintaining its sales growth.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
