Alberto-Culver Co.'s (ACV) fiscal first-quarter earnings rose
30%, missing Street estimates, as sales growth was damped by
currency fluctuations and rising input costs that cut into
margins.
The personal-care product maker's shareholders approved its $3.7
billion acquisition by consumer products giant Unilever PLC
(ULVR.LN, UL) last month after it conceded in November to some
institutional investors' demands for the company to make itself
more amenable to competing offers.
If approved by U.S. regulators, the pending merger sets the
stage for more intense competition in the hair and skin-care sector
by vaulting Unilever to a more powerful position in the U.S. beauty
industry. Most household products companies--fighting a consumer
spending slump in the developed world--are trying to use their
scale to give them an edge.
The company last month bought U.K.-based Simple Health &
Beauty Group Ltd., adding to a product line that includes the
TRESemme, Alberto VO5, Nexxus and St. Ives brands.
For the quarter ended Dec. 31, Alberto-Culver reported a profit
of $47.6 million, or 47 cents a share, up from $36.6 million, or 37
cents, a year earlier. Excluding restructuring impacts, acquisition
costs and other charges, earnings from continuing operations
climbed to 52 cents from 46 cents.
Revenue rose 12% to $405.3 million as organic sales, which
exclude currency fluctuations, acquisitions and divestitures, grew
4.4%.
Analysts polled by Thomson Reuters had forecast earnings of 54
cents a share on revenue of $411 million.
Gross margin edged down to 53.2% from 53.4% due to higher input
costs.
U.S. sales grew 2.8% in the first quarter. International sales
surged 25%, largely thanks to currency fluctuations and the effect
of Alberto-Culver's acquisitions.
Shares closed Friday at $37.17 and were inactive premarket. The
stock has hovered around $37.50 a share since Unilever offered that
price in September.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com;