By  on April 29, 2008

Second-quarter profits at Alberto-Culver Co. jumped 28.7 percent to $29 million, from $22.6 million last year, on sales that rose 7.7 percent, the company said Monday.

Executives attributed the strong results to the firm's TRESemmé hair care and St. Ives skin care brands, as well as its ethnic brands, Motions and Soft & Beautiful.

Earnings per diluted share for the quarter ended March 31 came in at 28 cents, compared with 23 cents in the same period a year ago, meeting Wall Street analysts' expectations for the current period, according to Yahoo Finance.

Second-quarter revenues reached $412.8 million, compared with $383.4 million in the year-ago period.

"This was a very good quarter," V. James Marino, president and chief executive officer of Alberto-Culver, told analysts during a conference call Monday morning. "We either met or exceeded our expectations," he continued, adding that the firm is pleased with the direction and positioning of its brands, as well as its margins.

The firm's gross profit margin rose to 53.4 percent of sales from 52.1 percent a year ago. Operating profits were up 17.5 percent to $38.3 million, while advertising and other marketing investments rose 5.4 percent to $76.4 million.

Marino noted the firm was in the early stages of introducing TRESemmé in Spain, which he said was the world's 11th largest hair care market. "It did very well in pretests there," Marino said of TRESemmé. "We think this brand can play very well in Western Europe."

The company expects advertising and marketing expenses to account for a higher percentage of sales during the upcoming third and fourth fiscal quarters as it supports the launch of TRESemmé in Spain.

During the first half of fiscal 2008, earnings vaulted more than threefold to $59.9 million, from $16.7 million in the first half a year ago, as restructuring and other expenses plunged. Sales came in at $813.4 million, a 10.7 percent increase from $734.5 million in the first half of fiscal 2007.

— Matthew W. Evans

U.K. Questions Firms on Pricing

LONDON —
Unilever, Procter & Gamble and Reckitt Benckiser have been contacted by the U.K.'s Office of Fair Trading, which is reportedly investigating allegations of price fixing — of health and beauty products and groceries — between suppliers and retailers here."We can confirm that P&G was visited by the OFT on Thursday," stated P&G. "Consistent with our principles, we are fully cooperating with their inquiries. We do not have any additional information to share at this stage, save to say that it is P&G's policy to fully abide by the spirit and letter of the law."

A spokesman for Unilever also confirmed the company had been contacted, and that it is in the process of collating a response. Reckitt Benckiser stated it had been sent a request for limited information.

Supermarkets, including Tesco, ASDA and Sainsburys, said they were cooperating with the OFT's investigation. A spokeswoman for the Morrisons supermarket chain declined comment Monday, as did a spokeswoman for the OFT.

Beiersdorf Sees Cost Reduction

BERLIN — The realignment of Beiersdorf's consumer supply chain is bringing the German consumer goods giant a reduction in costs to 15 million euros, or $23.6 million at current exchange, instead of 30 million euros, or $47.2 million, of outstanding expenses in 2008.

In reviewing the project, which began in 2005, Beiersdorf said "new circumstances have lead the board...to revise the initial estimates." Beiersdorf originally earmarked 220 million euros, or $345.8 million, for the realignment, but now expects costs to amount to 200 million euros, or $314.4 million.

The remaining financial impact of the overhaul is slated for 2008, with only minor expenses foreseen for 2009. Cost savings targets arising from the realignment remain unchanged, with a savings of 70 million euros, or $110 million, foreseen for 2008 and 100 million euros, or $157.2 million, annually from 2009 onward.

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