NEW YORK — Third-quarter profits at Alberto-Culver Co. slid by 17.8 percent to $25.1 million, or 25 cents a diluted share, from $30.5 million, or 33 cents a diluted share, in the year-ago period.
The dip in profits for the quarter ended June 30 was due in large part to the firm's discontinued operations — the year-ago quarter included earnings from Alberto-Culver's beauty supply distribution business, which was spun off in November into Sally Beauty Holdings Inc.
While earnings from discontinued operations fell to $930,000, or 1 cent a diluted share, from $10.1 million, or 11 cents a diluted share, earnings from continuing operations rose by 18.2 percent to $24.2 million, or 24 cents a diluted share, from $20.4 million, or 22 cents a diluted share.
Revenues increased by 9.2 percent to $385.5 million from $353.2 million in the third quarter last year, driven by the performance of Alberto-Culver's TRESemmé and Nexxus hair care brands.
"Overall, we're extremely pleased with our results," V. James Marino, Alberto-Culver's president and chief executive officer, said during a conference call with analysts on Monday. He noted, "TRESemmé sales exceeded $100 million for the second consecutive quarter, and TRESemmé is now the number-two styling brand in the U.S. and the number-five brand overall."
On the Nexxus front, it is "our aspiration to [expand] this brand outside the U.S. [and] we continue to look at [doing so]," said Marino. While he did not put a time frame on an international launch of Nexxus — "Nothing short-term," he said — Marino asserted: "We'll do it in the right way."
As sales of the TRESemmé and Nexxus brands increased, Alberto-Culver's St. Ives skin care brand "has struggled," Marino noted. "It has not been the most solid part of our portfolio," he added, citing a highly competitive environment that includes brands like Jergens and Nivea.
"There's a ton of options for this consumer. We haven't unlocked the marketing mix on this one [and] trying to break through it is a difficult thing — but we're not going to give up on it," said Marino. "I think we're going to turn the St. Ives thing around. We'll continue to increase our investment [behind it]."Alberto-Culver noted in a statement that advertising and other marketing expenditures grew by 5.5 percent during the quarter to $73.7 million, from $69.9 million in the same period a year ago.
Earnings for the first nine months of the fiscal year were down to $41.8 million, or 43 cents a diluted share, from $139.5 million, or $1.50 a diluted share, in the same period a year ago. The company reported a loss of $4.2 million, or 4 cents a diluted share, from discontinued operations for the nine-month period, versus earnings of $89.9 million, or 97 cents a diluted share, in the same nine-month period a year ago.
Advertising and marketing expenditures rose 1.8 percent to $207.1 million, from $203.4 million last year.
And, while the firm's "first priority" for its $330 million in cash, cash equivalents and short-term investments is to pursue an acquisition strategy, executives did not cite specific buyout targets.
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