Monday, personal care products manufacturer Alberto Culver Co. (ACV) reported an increase in profit for first-quarter, helped by sales growth and margin improvement. The group lifted its quarterly dividend by 13.3%.
The Melrose Park, Illinois-based company reported higher quarterly profit of $36.59 million compared to $31.65 million a year ago, while earnings per share from continuing operations rose to $0.37 from $0.32 last year. The net income included restructuring and discrete items, primarily transaction expenses related to acquisition of Simple Health & Beauty Group Ltd.
On an adjusted basis, earnings from continuing operations were $45.66 million or $0.46 per share, higher than $40.35 million or $0.41 per share in the previous year. On average, fourteen analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share. Analysts' estimates typically exclude special items.
Alberto Culver's quarterly net sales were up 2.9% year-over-year at $363 million compared to $352.8 million. However, net sales fell short of analysts' projection of $370.67 million.
Sales fell to $218.84 million from $224.46 million in the U.S. region, while sales grew to $144.11 million from $128.36 million in International region. The group noted that in the U.S., despite market share gains and continued solid growth on TRESemme, reported sales declined 2.5% versus prior year. International sales increased 12.3% behind double-digit growth on TRESemme and St. Ives.
During the quarter, gross profit margin was 53.4% up from 51.6% in the prior year. Selling and administrative expenses as a percentage of net sales rose to 21.5% from 20.7% in the earlier year, due to absence of foreign currency transaction gains earned in the year-ago period. However, it was partially offset by cost savings initiatives; lower transportation costs and stock-based compensation expenses. Operating earnings declined to $55.40 million from $59.32 million.
The group noted that focus and consistent strategy of driving growth in core beauty care brands is a major contributor to its success. Commenting on James Marino, president and chief executive said, "While the hair care category remains soft, trends are slowly beginning to improve and we continue to gain market share. Sales growth was particularly strong in our international segment, even with a very strong performance in the prior year quarter."
The board declared 13.3% higher dividend of 8.5 cents per share, payable on February 23 to shareholders on record February 11.
ACV finished Friday's regular trading at $28.39, on the NYSE.
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