Alberto-Culver Co. reported a 2.4 percent rise in first-quarter profits and beat Wall Street analysts’ expectations.
Net income for the three months ended Dec. 31 was $31.7 million, or 32 cents a diluted share, versus $30.9 million, or 31 cents, in the year-ago period.
Excluding restructuring expenses, the discontinued Cederroth operation, divested by the company in May, and tax items relating to the Cederroth sale, earnings per share came to 41 cents, above analysts’ expectations of 34 cents, versus 33 cents in last year’s quarter.
The firm posted net revenues of $352.8 million, 2.8 percent ahead of $343.2 million a year ago. Excluding the effects of foreign exchange rates and the acquisition last year of Noxzema, organic sales increased 9.5 percent in the quarter. Gross margin fell to 51.6 percent of sales from 52 percent.
Total revenues were driven by double-digit growth of the firm’s stalwart TRESemmé and Nexxus brands, V. James Marino, president and chief executive officer of the Melrose Park, Ill.-based firm, told analysts during a conference call.
Pretax profits vaulted 37.3 percent to $60.6 million, from $44.1 million in the year-ago period, as a result of restructuring and other operating earnings.
The firm has some $334.4 million in cash, and spent about $100 million to buy Noxzema, but Marino said in response to an analyst during the call that, “in this economic environment, the most prudent course of action is to [hold] back on share buybacks.”
The company raised its quarterly cash dividend 15.4 percent to 7.5 cents a share, payable on Feb. 20 to shareholders of record Feb. 5.
When asked by another analyst about Unilever’s announcement that it would acquire Tigi (see related story this page), Marino replied, “We don’t know [Unilever’s] plans, and [Tigi] had been for sale for quite some time. We don’t look at this as having any meaningful impact on our business.”
The firm’s advertising and marketing expenditures declined 12.6 percent to $49.4 million, and such funds are also being focused on international markets. Alberto-Culver is introducing Nexxus in Canada and will introduce the brand in Chile later in the year.
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