Professional hair care keeps Alberto Culver's sales strong
Net sales for the quarter increased to $352.8m from $343.2m in last year’s first quarter.
Excluding the effects of currency and the recent Noxzema acquisition this 2.8 percent increase becomes a 9.5 percent sales rise.
It was the company’s professional hair care brands TRESemme and Nexxus that were the main drivers of the results, according to the Illinois-based company.
Although US sales looked healthy with a 7.99 percent increase, international operations suffered from an unfavourable exchange rate.
International sales dropped from $135m to $128m, and overall foreign exchange had a negative $32.1m effect on this figure.
Raw materials costs push profit margins down
However, the increase in sales did not manage to keep profit margins up, contracting 40 basis points from 52.0 percent to 51.6 percent.
This, the company asserts, is down to rising raw material costs that were almost offset by making manufacturing more efficient and improving the product mix.
Advertising and other marketing expenditure was lower for the quarte - down to $122m from $132m - however the company expects this to increase in the next quarter.
“We expect advertising and marketing investments to accelerate in subsequent quarters behind several key initiatives across the business,” said CEO James Marino.
Skin care focus
The company recently purchased the Noxzema brand from Procter and Gamble in an attempt to strengthen its skin care portfolio.
Commenting on the purchase back in September 2008, Marino said: “Noxzema is an iconic US skin care brand and our team is very excited to add it to our beauty care portfolio.”
The range joins the company’s existing beauty brand ,St. Ives, which offers botanically-based face and body products, and the company hope that together they will provide ‘significant opportunities for growth in the skin care category’.
