NEW YORK — Alberto-Culver Co. reported Thursday a jump in second-quarter earnings on a 7.1 percent increase in net sales.
In the three months ended March 31, the maker of Alberto VO5, St. Ives and TRESemmé hair and personal care products earned $56.9 million, or 61 cents a diluted share, up 15.8 percent from $49.1 million, or 53 cents, the previous year.
Results in the most recent quarter included stock options expenses of $3.1 million and a $3.6 million expense related to the failed $2.6 billion merger of the company’s Sally Holdings Inc. into Regis Corp. The deal was called off in early April after Alberto-Culver’s board of directors said it could no longer support the transaction; Regis subsequently terminated the deal.
Carving out expenses, earnings in the second quarter would have been $59.9 million, or 64 cents, Alberto-Culver said, which would compare with $51.4 million, or 55 cents, in the prior-year period. Analysts had been expecting earnings per share of 60 cents in the latest quarter.
Quarterly net sales were $946.8 million, up from $884.1 million. By division, sales in the global consumer products business rose 13 percent to $373.2 million, while the beauty supply distribution segment, which is made up of Sally Beauty Supply and Beauty Systems Group, saw sales increase 3.7 percent to $581.1 million.
In the six months, Alberto-Culver earned $109 million, or $1.17, up from $98.5 million, or $1.06, a year ago. Net sales were $1.85 billion, up 6.6 percent.
Howard Bernick, president and chief executive officer, said in a written statement that second-quarter sales benefited from the launch of its Nexxus brand into retail stores and from the strong performance of TRESemmé.
Regarding the failed transaction with Regis, Bernick said he believes “terminating the merger agreement due to the circumstances that occurred was the right course of action for Alberto-Culver and its shareholders.”
The company will subsequently record a $50 million breakup fee in the third quarter that will pull down the quarter’s EPS by 34 cents after taxes. Analysts are expecting the company to earn 64 cents in the third quarter.
“Alberto-Culver will continue to build its businesses and explore acquisitions and other strategic alternatives as we remain focused and committed to operating the company in the interest of building shareholder value over the long term,” said Bernick.
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Separately, the company said its board has approved a 13 percent increase to the annual dividend to 52 cents. The next quarterly dividend of 13 cents will be paid on May 19.