By  on July 31, 2007

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.

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus