Alberto Culver sales beat Wall St view

By Jessica Wohl

CHICAGO (Reuters) - Alberto Culver Co (ACV.N) posted better than expected quarterly sales on Monday, helped by its mid-priced TRESemme hair care products and growth in Latin America.

The company posted a lower quarterly profit from continuing operations, but met Wall Street expectations, and shares rose as much as 8.7 percent.

"We really think our portfolio is well-positioned, not just for this economic time, quite frankly, for any economic time," Chief Executive James Marino said in an interview, referring specifically to the company's hair care products.

Alberto Culver's hair care products range from 99 cent bottles of Alberto VO5 shampoo to $15 Nexxus conditioner.

Alberto Culver said it sees "soft" hair care category trends in key markets such as the United States and United Kingdom. Still, it plans to raise prices on certain products, including TRESemme and Nexxus, as of January 1 to recover higher commodity costs.

The U.S. hair care category has been down by about 2 percent during the last 12 to 24 weeks, Marino said. Despite that sluggishness amid the economic downturn, the superpremium segment is showing the best growth, Marino said.

"Despite what one may imagine in terms of consumers trading down or cutting back, that doesn't appear to be the case," he said.

Still, any trading down could help Alberto Culver since many of its lines are less expensive than products from rivals such as Procter & Gamble Co (PG.N) and L'Oreal (OREP.PA) and store brands account for a small percentage of hair care sales.

SALES RISE, ACQUISITIONS POSSIBLE

Fiscal fourth-quarter profit from continuing operations was $20.2 million, or 20 cents per share, compared with $29.4 million, or 29 cents per share, a year earlier.

Excluding items, Alberto earned 31 cents per share, up from 26 cents a year earlier and in line with analysts' average forecast, according to Reuters Estimates.

Analysts were focused on continuing operations since the company sold its Cederroth International business to Nordic private equity firm CapMan.

Sales rose 7.3 percent to $386 million, topping analysts' average view of $379.25 million. Excluding the impact of foreign exchange rates, sales rose 8.4 percent.

The market's reaction to Alberto's results "could be a key indicator to see how the rest of the space will trade this week" as others report earnings, UBS analyst Nik Modi said in a research note.

Modi has a "neutral" rating on Alberto and said it was the first company he watches to post a sales hit from foreign exchange. Other industry players set to report this week include P&G.