CURTIS, BEAUTICONTROL POST QUARTER LOSSES
NEW YORK — Helene Curtis Industries Inc. reported a loss of $7.2 million in the third quarter ended Nov. 30, blaming poor business conditions in Japan and lower-than-anticipated sales of hair-care products in North America.
The company had forecast a loss in late November.
In the year-ago quarter, Helene Curtis earned $3.4 million, or 35 cents a share. Sales in the most recent quarter declined 5.4 percent to $267 million from $282.4 million.
Earnings in the nine months nosedived 97.7 percent to $232,000, or 2 cents a share, from $11.4 million, or $1.20, a year ago. Sales dipped 1.2 percent to $890.1 million from $900.6 million.
Ronald J. Gidwitz, president and chief executive officer, said a “very strong” fourth quarter should result in sales for the full year being flat to slightly higher than the prior year.
“We remain confident that sales increase in the fourth quarter and cost containment activity will enable us to reach our previously announced pretax earnings range of $20 million to $24 million for the fiscal year,” he said.
Gidwitz described Helene’s overall business as “solid.” In the U.S., Helene Curtis’s hair care brands rank number one in units and number two in dollars, while skin care and antiperspirant-deodorant on a year-to-date basis are both seeing double-digit gains.
Double-digit growth was cited in Canada, New Zealand, Australia and Scandinavia.
On the downside, business in Japan is down 20 percent in local currency sales, dragged down by price deflation, a stagnant economy and competitive pressures. BeautiControl Cosmetics Inc., a direct marketer and manufacturer of cosmetics, reported fourth-quarter profits dropped 51 percent on a 3.7 percent rise in sales.
In the quarter ended Nov. 30, earnings fell to $636,729, or 10 cents a share, from $1.3 million, or 19 cents a year ago. Sales were up to $19.1 million from $18.4 million.
“Earnings were lower than a year ago due to the costs of a recruiting program that ended in September and start-up losses in the United Kingdom,” said Richard W. Heath, president and chief executive officer, in a statement. He noted that sales for the latest quarter included the introduction of Diva Nail and Lip Color and a new Bath and Body fragrance line. In the full year, profits declined 26 percent to $4.7 million, or 70 cents, from $6.1 million, or 88 cents before a special gain a year ago.
After a $172,053 accounting gain, earnings came to $6.3 million, or 90 cents. Sales increased 5.8 percent to $74.7 million from $70.6 million. Heath added, “Our 1995 annual earnings results were below our expectations due to less-than-expected sales growth in the United States and because of recruiting and product development costs.”
The Dallas-based company said it continues to invest in the business with the expansion of its Hispanic market development program, improving merchandising, and seeking other profitable low investment opportunities abroad. BeautiControl also noted that it repurchased 772,825 shares of its stock in fiscal 1995 and since then has purchased an additional 18,100 shares, reducing the number of shares authorized to be repurchased to 357,400. — Fairchild News Service