Global hair care market boosts Alberto Culver’s net sales
Net sales for the first quarter increased 11.7 percent to $405.3m compared to $363.0m in the prior year first quarter.
In the US, sales increased 2.8 percent in the first quarter, which the company claims is largely due to strength in hair care, particularly its Nexxus brand.
Strong international growth
International sales on a reported basis increased 25.2 percent, with the net effect of foreign currency fluctuations and acquisitions accounting for approximately 18.3 percent of the growth, also with strong growth in all regions in both hair care and skin care.
The hair care and skin care firm’s gross profit margin was 53.2 percent in the first quarter compared to 53.4 percent in fiscal year first quarter 2010. Alberto Culver felt the slight decrease in gross margin was primarily due to higher input costs.
Advertising and other marketing investments in the first quarter increased 9.6 percent to $55.0m compared to $50.1m in the prior year first quarter.
Selling and administrative expenses as a percentage of net sales decreased 110 basis points to 20.4 percent in the first quarter compared to 21.5 percent in the prior year first quarter.
The company states that whilst a portion of the improvement was due to sales growth coupled with continued cost containment, the prior year first quarter also included costs in the US related to the SAP implementation and the ramp up of production at the Alberto Culver’s Jonesboro, Arkansas manufacturing facility.
Unilever acquisition
Last September Alberto Culver announced that it had entered into a definitive agreement in which Unilever would acquire all of the outstanding shares of the beauty care firm for $37.50 per share in cash, valuing the company at approximately $3.7 billion.
The Anglo-Dutch consumer giant was given the go-ahead to acquire all outstanding shares following the approval of theAgreement and Plan of Merger dated September 27, 2010 and amended on November 29, 2010 following shareholder approval in December.
With regulatory approvals and certain closing conditions still needing to be fulfilled Alberto Culver expects the merger to close in calendar year 2011.
