A year ago, Carl’s Jr./Hardee’s brash “We Believe in Burgers” TV commercial proclaimed, “We believe in putting hot models in our commercials because ugly ones don’t sell burgers.” That commercial may not have been politically correct but it is empirically true: The two chains reported solid sales for the 16-week quarter ended May 21, 2012, a period that encompasses its TV campaign with swimsuit model Kate Upton.
Carl’s Jr. same-store sales were up 2.6% for the quarter, compared with +2.1% for the year-earlier quarter. Hardee’s also posted a 2.6% gain in comp sales despite a difficult comparison with last year’s 9.6% increase. Adjusted EBITDA margin for company-operated restaurants rose to 19.3% from 17% a year ago.
Carl’s Jr. had a 2.8% gain in transactions, thanks in part to the extension of scratch-made biscuits throughout Los Angeles, its largest market. Its average check was flat at $6.98. Hardee’s saw a 2.2% decline in transactions (resulting in part from comparisons with last year’s exceptionally strong quarter) although its average check increased to $5.57 from $5.30.
CEO Andy Puzder credited the Kate Upton TV advertising backing the introduction of its Southwest Patty Melt for the chains’ solid performances. And it might not have been the burger. “Even without the burger, the advertising was a help,” he told analysts during a quarterly conference call. Since its posting on Feb. 24, 2012, an online-only “director’s cut” of Upton’s sultry “Drive-In” commercial has been viewed more than 4.6 million times on YouTube. In April, the company said it had seen an 83% increase in visits to the Carl’s Jr. website in the weeks after the director’s-cut video was posted.
Chief Marketing Officer Brad Haley said Carl’s Jr./Hardee’s is “being approached by celebrities who want to appear in our ads because of the pop-culture buzz they generate. I can’t think of any other fast-food brand that would be viewed that way by rising stars.”
Carl’s Jr. last week added sweet-potato fries to its menu. Hardee’s has added the Hand-Breaded Chicken Tender Sandwich that its sibling introduced in May.