Alberto Culver Co.’s second-quarter profits slid 3.3 percent as its hair care business picked up momentum and helped the firm ward off some of the recession’s ills.
This story first appeared in the April 28, 2009 issue of WWD. Subscribe Today.
Earnings for the quarter ended March 31 dipped to $28.1 million, or 28 cents a diluted share, compared with profits of $29 million, or 28 cents a share, in the year-ago period. Reduced 10.1 percent by currency fluctuations, net sales slid 1.4 percent for the quarter to $344.3 million, from $349.4 million.
Gross margin fell to 50.3 percent of sales from 53.3 percent in the prior-year quarter, mainly because of currency shifts and higher raw material costs related to the spike in oil prices last fall. The company said it has plans and projects in place to grow gross margin over time.
“Our business continues to be sound, with great brands, an experienced and focused leadership team and a strong balance sheet that allows us to invest both behind our equities and our infrastructure,” said V. James Marino, president and chief executive officer, on the company earnings call. “Our long-term strategy of growth and margin expansion remains in tact, and our team is committed to continuing to deliver results and creating value for our shareholders.”
Advertising and marketing expenditures were $57.6 million, up from the first quarter but 14.5 percent below year-ago levels. Lower media costs and a shift toward trade promotion in the marketing mix contributed to the reduction, as did the changes in currency.
The Melrose Park, Ill.-based firm, whose brands include TRESemmé, Alberto VO5, Nexxus and St. Ives, reported first-half profits fell 0.3 percent to $59.7 million, or 60 cents a share, from $59.9 million, or 59 cents a share, a year earlier. Revenue for the period grew 0.7 percent to $697.2 million versus $692.6 million.
Shares of the company fell $1.93, or 8.4 percent, to close at $20.93 on Monday.