Global brands and acquisitions boost Alberto-Culver
record sales and profits on the back of steady underlying sales for
its leading global brands and the sale of its European professional
hair care division, reports Simon Pitman.
The company has undergone a period of great change this year, with acquisitions and divestments of less profitable divisions helping to boost steady underlying growth.
For the third quarter, ending June 30 2005, the company reported that sales increased 9.2 per cent to reach $898.9 million, while net earnings rose 10 per cent to $55.8 million, excluding divestments and non-cash charges.
Howard Bernick, company CEO, said, "Onan organic like for like basis, excluding acquisitions, the Indoladivestiture, and a positive benefit from foreign currency translation, sales increased 5.6 per cent in the third quarter and 5.6 per cent in the first nine months of our2005 fiscal year."
Bernick added that earnings per cent growth rate for the quarterhad been in line with expectations as savings from last year's results had been invested into building long-term top line revenues.
The quarter's results excluded a non-cash charge to convert the classification of its common stock in 2004, as well as the sale of its European professional hair care business, Indola, for $10.1 million. These considerations meant that the company's net profit for the quarter stood at $53.4 million, compared to $51.5 million in the previous year.
The Tresemme brand was reported to have performed strongly in both the UK and North America, backed up by the ongoing success of the St Ives and Alberto VO5 brands. This all contributed to strong double digit growth for the company's consumer brands for both the third quarter and the first nine months of the financial year.
The company's beauty retail arm, Sally Beauty Supply, continued steady growth, expanding store coverage globally, however its other retail arm, Beauty Systems Group (BSG) was negatively impacted by loss of sales as well as disruption to its distribution.
However, Bernick said that a rise on operating margins for the BSG division would be built upon during the course of the next several years, to strengthen its position.
"Throughout this year we have again continued to invest resourcesinto our brands and businesses, including significant advertising andmarketing spending, which is expected to approach $300 million this year," Bernick said.
Despite rising raw material costs and higher fuel costs continuing to impact results, the company believes that the full year will see underlying results to continue in line with expectations.
In May this year, the company said it intended to 'aggressively' acquire as it continues to expand in the market, following its agreement to buy up the Nexxus hair care brand.
