Alberto-Culver Co. recorded fourth-quarter profits that beat Wall Street estimates by a penny a share as the consumer products firm said it would close its manufacturing plant in Toronto, resulting in about 115 layoffs.
NEW YORK — Alberto-Culver Co. recorded fourth-quarter profits that beat Wall Street estimates by a penny a share as the consumer products firm said it would close its manufacturing plant in Toronto, resulting in about 115 layoffs.
Net earnings during the quarter ended Sept. 30 were $36.5 million, or 36 cents a diluted share, compared to $65.8 million, or 70 cents a share, during the same period a year ago, when earnings from Sally Beauty, which was spun off into a freestanding public company last November, were still part of the Melrose Park, Ill.-based company's operations. Sales during the quarter reached $421.5 million, a 14.5 percent increase from $368.1 million in the year-ago period.
Analysts expected Alberto-Culver to earn 35 cents a share on revenue of $399.5 million, according to Yahoo Finance.
As a result of the closure of its manufacturing plant in Toronto, which is expected to be completed next March, Alberto-Culver expects to incur $8 million in restructuring costs during fiscal 2008. The bulk of these costs, about $6 million, will occur during the first quarter, according to the firm. Alberto-Culver expects to save about a penny per share in fiscal 2008 as a result of the plant closure and "significantly more than that" in 2009.
"The majority of [the] current production in Canada will be shifted to other facilities," V. James Marino, Alberto-Culver's president and chief executive officer, said during a conference call with analysts on Monday. "This move will allow us to leverage our new [manufacturing] facility in Jonesboro, Ark."
Full-year profits reached $78.3 million, or 80 cents a diluted share, compared to $205.3 million, or $2.20 a share in 2006. Sales on the year hit $1.54 billion, up 10.2 percent from nearly $1.4 billion last year.
Marino said the firm's TRESemmé and Nexxus hair care brands, both of which posted double-digit sales growth, drove revenues. "TRESemmé continued its growth trajectory and delivered an outstanding quarter and year," said Marino. He added that TRESemmé sales exceeded $400 million in 2007, growing by more than 30 percent over last year.
Alberto-Culver's spending on advertising and other marketing initiatives increased by 10.8 percent for the full year to $284.7 million, from $256.9 million last year.Sales of the company's Alberto VO5 brand decreased in the low-single digits due to "softness in Latin America," Marino said, adding the firm's St. Ives skin care brand, which has been reformulated and repackaged, is well-positioned for the coming year.
"We're committed to the skin care market," said Marino, who also noted — without specifying targets — that an acquisition was likely imminent. "We want to make one before the end of the year," he said. — Matthew W. Evans
Ireland Signs Cosmetics Deal
LOS ANGELES — Kathy Ireland is adding to her model-turned-mogul résumé.
Ireland's namesake company, Kathy Ireland Worldwide, has inked a deal with E.L. Erman, a private label cosmetics manufacturer from Israel, to create three collections of spa, body and face treatments — Kathy Ireland Spa, Kathy Ireland Home Spa and I.D. Solutions for Men — using natural ingredients from the Dead Sea.
The collections will hit shelves at selected retailers and spas worldwide early next year.
Kathy Ireland Worldwide launched in 1993 with socks, but has since incorporated everything from bedding to apparel, candles, mattresses and jewelry. The company's annual retail sales volume tops $1 billion. — Rachel Brown
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