CKE Restaurants Inc. (CKR), owner of the Hardee's and Carl's Jr. hamburger chains, hopes that its stubborn refusal to wade into the fast-food value wars will help sales sizzle in an economic rebound.

For the time being, CKE, known for gut-busting burgers popular with young men, is suffering some heartburn. Same-store sales for the two brands fell 1.8% in the first quarter, weaker than analysts would have liked, with Carl's Jr. weighing down results. CKE says that competitors' deep discounts are undercutting its premium offerings, like Hardee's "Six Dollar Thickburgers" - so-named for their perceived cost at a full-service restaurant - for $3.99.

The plus side was that CKE was able to hold margins flat from year-ago levels, as the company prospered from lower food and labor costs.

Sales trends are keeping some analysts from getting bullish on CKE shares, which are flat this year, but Feltl & Co. on Thursday initiated coverage on CKE with a "buy" rating, liking CKE's potential for sales recovery in an economic rebound.

In recent trading, shares were at $8.68, having receded back to what they traded at before the company announced preliminary first-quarter results in late May. Analysts will be looking for more clarity on sales and sustainability of cost controls when CKE reports first-quarter earnings next week.

The company may be ready to crack its premium plan, if ever so slightly, as it's taking steps to draw attention to some of its lower-priced products.

Chief Executive Andrew Puzder says CKE has added a combo meal centered around its value options, using a small drink and fries to get customers to build their bill. The company is also testing replacing its 20-ounce soda with a 16-ounce drink for 99 cents, hoping to entice customers who are foregoing drinks to buy the high-margin items.

Still, CKE isn't about to have Padma Lakshmi or Paris Hilton, celebrities who have been featured in provocative Carl's Jr. ads, hawking 99-cent burgers anytime soon. The company doesn't want consumers to get used to discounts or come to expect food at a low price.

"You lock yourself into a price point and it's a death knell," Puzder said in a recent interview.

That's problematic as costs rise, which analysts are seeing for 2010. If customers become set on a certain price, restaurants would have to either change their dish or face lower profits.

"If you assume we're going to have inflation, and you've trained your customer that you have a 99-cent menu, what are you going to serve them? A bun?" said Puzder.

Economists are beginning to think the recession will end this quarter, and while growth will remain slow-going, Carl's Jr. and Hardee's hope customers will beef up their orders with sides and drinks, as well as splurge for indulgent burgers. Another key is seeing signs of stability in California, where the unemployment rate is doing a number of Carl's Jr.'s sales.

"When things do get better, especially in California, I do see major gains for them," said Conrad Lyon, analyst at Global Hunter Securities LLC, who has a "hold" rating on the stock.

CKE is also pushing along with plans to expand. It recently signed a franchising deal to open nearly 200 Carl's Jr.'s stores in Texas and is planning to add more Hardee's locations to existing markets. CKE will also target Florida for new stores, hoping better winter weather there will offset weakness in some Midwest states.

CKE also sees room to expand internationally and is looking for a greater stake in doing so. Puzder said the company is in early talks for joint ventures on international development rather than arranging them as licensing agreements.

"They have an under-appreciated international growth story that will come into more focus over the next several years," as international operations grow, Credit Suisse's Keith Siegner said.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com