By  on April 26, 2010

Sales gains helped Alberto-Culver Co. boost its profits in the second quarter, although disruptions in its supply chain kept earnings below Wall Street expectations.

In the three months ended March 31, profits at the Melrose Park, Ill.-based beauty supplier rose 7.3 percent to $30.1 million, or 30 cents a diluted share. A year ago, its net income totaled $28.1 million, or 28 cents a share.

Excluding items, earnings per share equaled 31 cents. Analysts polled by Yahoo Finance had expected EPS of 36 cents, on average.

Revenues in the quarter grew 11.8 percent to $384.8 million from $344.3 million 2009.

Sales in the U.S., however, were off by 1.7 percent, due largely to “lower than normal customer service levels” resulting from disruptions in the firm’s manufacturing, supply chain and systems during the second quarter, Alberto-Culver stated.

V. James Marino, president and chief executive officer of Alberto-Culver, told analysts during a conference call Monday that “a combination of ramping up” the firm’s Jonesboro, Ark.-based manufacturing plant and “scaling down” its facility in Chatsworth, Calif., led to the disruptions, which, he added, only affected the company’s U.S. operations.

“While we have made solid progress in restoring customer service levels, particularly in March, we expect some of the disruptions to continue into the current quarter,” he stated, indicating the disruptions have not affected distribution at retail.

Because of the difficulties, some cost-saving measures have been put “on hold,” executives said, notably the closing of the Chatsworth facility, which was to be shuttered in the middle of the year.

Marino said in the coming months, resolving the supply chain issues will be a priority, noting, “We think we have the majority of [those] issues behind us.” As a result, he indicated, U.S. sales growth is possible during the third quarter.

First-half profits were up 11.7 percent to $66.7 million, or 67 cents a share, from $59.7 million, or 60 cents, on sales that increased 7.3 percent to $747.8 million from $697.2 million in the year-ago period.

Shares of Alberto-Culver closed at $28.95, up 95 cents, or 3.4 percent.

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