Alberto-Culver Co. posted a 15.6 percent rise in first-quarter profits to $36.6 million, or 37 cents a diluted share, versus $31.7 million, or 32 cents a share, in the same period a year ago.
Excluding restructuring and discrete items, primarily transaction expenses related to the December acquisition of U.K.-based Simple Health & Beauty Group Ltd., diluted earnings per share from continuing operations increased 12.2 percent to 46 cents, compared with 41 cents in the prior-year quarter, Alberto-Culver president and chief executive officer V. James Marino told Wall Street analysts during a conference call Monday.
Analysts, on average, had expected EPS of 43 cents a share, according to Yahoo Finance. Sales for the three months ended Dec. 31 were up 2.9 percent to $363 million, from $352.8 million, on international sales that rose 12.3 percent to $144.1 million, from $128.4 million in the year-ago period. U.S. revenues were off 2.5 percent to $218.8 million from $224.5 million a year ago.
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Excluding the effect of foreign currency fluctuations, acquisitions and divestitures, sales were flat in the quarter, Alberto-Culver noted.
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“While the hair care category remains soft, trends are slowly beginning to improve and we continue to gain market share,” Marino stated. “Sales growth was particularly strong in our international segment, even with a very strong performance in the prior-year quarter.”
The TRESemmé hair care and St. Ives skin care brands experienced double-digit growth abroad and TRESemmé’s growth in the U.S. was “strong,” Marino told analysts.
“We feel good about the progress we’re making with TRESemmé,” he added during the call. International growth of St. Ives helped offset slower sales of the brand in the U.S. Also in the U.S., sales of the firm’s Nexxus and Noxzema brands lagged and sales of the Alberto VO5 brand were off due to the discontinuation of some items.
Discussing the roughly $384 million acquisition of Simple, a skin care brand, Marino said he believes the business “adds scale, knowledge and credibility to our skin care portfolio.” Sales of Simple exceeded $100 million at the time of the acquisition and Marino said he expects to grow the brand this year. He added that he believes annualized sales of Simple could be in the $110 million ballpark.
Advertising and other marketing investments in the first quarter increased to $50.1 million compared with $49.4 million in the prior-year quarter, the firm stated, as spending behind TRESemmé and St. Ives increased by double digits.
The company added that, primarily as a result of lower commodity costs, its gross profit margin was 53.4 percent of sales compared with 51.6 percent a year ago. “We are very pleased with our gross margin improvement as it provides leverage to increase our advertising investments in our core beauty care brands,” Marino stated, adding, “the fundamentals of our business remain strong.”
The firm increased its quarterly cash dividend 13.3 percent to 8.5 cents a share, payable Feb. 23 to shareholders of record Feb. 11.