* Q3 adjusted EPS $0.39 vs Street view $0.37
* Sales rose 18.8 pct to $417.6 mln
* Shares hit all-time high
(Adds analysts' comment, stock action, byline)
By Ben Klayman
DETROIT, July 26 Alberto Culver Co (ACV.N)
posted a stronger-than-expected quarterly profit, as the maker
of Alberto V05 and TRESemme shampoos saw double-digit sales
growth across its beauty care brands, sending shares to an
The company, which competes with larger rivals Procter &
Gamble Co (PG.N) and L'Oreal SA (OREP.PA), pointed to lower
commodity costs and stronger demand for its TRESemme products.
"We continue to outperform the hair care category and gain
market share," Chief Executive Officer V. James Marino said in
a statement. "Double-digit organic sales growth was broad based
across our core beauty care brands."
Tim Ghriskey, chief investment officer with Solaris Asset
Management, said Alberto's revenue came in much stronger than
expected, but it also benefited from a buildup in inventory and
positive currency translation. His firm does not own shares in
the stock, but follows it closely.
"Its TRESemme brand of hair care products has been
performing quite well and advertising has been effective,"
Net income in the third quarter ended on June 30 rose about
69 percent to $47.2 million, or 47 cents a share, from almost
$28 million, or 28 cents a share, a year earlier.
Excluding one-time items, the company's earnings from
continuing operations were 39 cents a share, 2 cents above what
analysts polled by Thomson Reuters I/B/E/S had expected.
Net sales rose 18.8 percent to $417.6 million, topping the
$391.3 million analysts had expected.
Shares of Alberto rose to a new all-time high of $31.49,
and were still up $1.32, or 4.5 percent, at $30.72 in late
morning trading on the New York Stock Exchange.
Stripping out the effects of foreign currency fluctuations
and acquisitions and divestitures, sales rose 10.7 percent.
Sales rose 12.7 percent in the United States on strong
demand in several of the company's core brands, while
international sales jumped 29 percent, mostly due to heavy
Gross profit margin rose to 51.5 percent from 50.8 percent
due to lower commodity costs, while advertising and marketing
costs increased 20.1 percent, mostly from activity for TRESemme
and St. Ives, Alberto said. Alberto and other consumer products
companies have stepped up their advertising spending.
Stifel Nicolaus analyst Mark Astrachan said in a research
note that Alberto's gross profit margin came up short of his
expectations due to higher costs for disruptions from a move to
SAP (SAPG.DE) software that has hurt the company's ability to
track inventory. He maintained his "hold" rating on the stock.
While the acceleration in demand demonstrates Alberto's
ability to produce mid-single-digit revenue growth and share
gains in the U.S. hair care market, the promotional environment
in that sector remains a concern, he added.
The company also said its board had approved the regular
quarterly cash dividend of 8.5 cents a share, payable Aug. 20
to shareholders of record on Aug. 5.
(Reporting by Ben Klayman, editing by Gerald E. McCormick,
Lisa Von Ahn, Dave Zimmerman)