ALBERTO-CULVER MEETS ESTIMATES IN QUARTER
Byline: Evan Clark
NEW YORK — Alberto-Culver Co. posted solid, yet expected, third-quarter results and said it’s managing to reap at least some benefits from the sluggish economy.
Net income jumped 14.2 percent, to $29.1 million, or 50 cents a diluted share, from $25.5 million, or 45 cents, a year ago. Sales for the period ended June 30 rose 10.7 percent, to $634.4 million, against $573.1 million a year ago.
Results were on target with expectations and while analysts were pleased with the results, the stock failed to react, inching up a mere 2 cents to close at $43.70 Thursday on the New York Stock Exchange.
On a conference call, Howard Bernick, president and chief executive officer, joked: “I’m delighted to tell you we’re going to earn good bonuses this year with these growth rates.”
The firm’s consumer-packaged-goods business showed “solid sales increases” and pretax profits of more than 25 percent. The Sally Beauty subsidiary posted double-digit sales and pretax profit increases.
In a statement, the ceo noted: “We have increased our advertising and promotion investments behind our consumer brands rather than cutting back in these more challenging economic times and have continued as well to open new stores, add to our salon sales consultant group and make other investments to expand our Sally and Beauty Systems Group businesses.”
On the call, he added: “We have no evidence of any retail trade destocking in our business.” By way of example, he said Wal-Mart had increased its business with the company by 25 percent so far this year.
For the first three quarters, income rose 4.7 percent, to $78.6 million, or $1.36 a diluted share, against $75.1 million, or $1.33, a year ago. Excluding a year-ago $6 million, or 11 cents, extraordinary aftertax gain on the sale of a trademark, net income jumped 13.8 percent. Sales increased 12 percent, to $1.85 billion, compared to $1.65 billion a year ago.
For the fourth quarter, Bernick set topline projections of 7 to 8 percent, on a reported basis. Next year, he’s looking for a similar sales increase and “will continue to look for acquisitions to build our Sally and packaged-goods businesses.”