July 27, 2009 / 11:53 AM / 9 years ago

UPDATE 3-Alberto Culver sales fall short; shares slide

* Q3 adjusted EPS $0.30 vs. consensus view $0.29

* Q3 sales fall 3.6 pct to $351.6 mln, miss St view

* Sales up 2 pct excluding acquisition and currency

* Shares fall about 2 pct (Adds analysts’ sales forecast, comment, share move, byline)

By Jessica Wohl

CHICAGO, July 27 (Reuters) - Alberto Culver Co (ACV.N) posted a better-than-expected rise in quarterly profit on Monday, helped by sales of TRESemme, but sales and advertising spending was lighter than analysts anticipated, and its shares slid about 2 percent.

The company, which also makes Alberto VO5 shampoo and Mrs. Dash seasoning, said net earnings rose to $28 million, or 28 cents per share, in the fiscal third quarter that ended on June 30, from $21.1 million, or 21 cents per share, a year earlier.

Excluding certain items, earnings per share from continuing operations rose to 30 cents from 27 cents, topping analysts’ average forecast of 29 cents, according to Reuters Estimates.

Sales slipped 3.6 percent to $351.6 million, missing analysts’ average forecast of $356.3 million.

Sales rose 2 percent on an “organic” basis, before the impact from its acquisition of Noxzema and the stronger U.S. dollar.

JP Morgan analyst John Faucher said he expected to see organic sales growth of 3 percent to 4 percent.

While TRESemme sold well, sales dropped in Spain, where the brand was introduced a year ago. Its private-label products and Soft & Beautiful line were also pressured due to the weak economy, Alberto said.

    Sales and gross margin were lower than BMO Capital Markets analyst Connie Maneaty anticipated. She and Faucher also said the company spent less than expected on advertising.

    Gross profit margin declined 2.2 percentage points to 50.8 percent. While oil-derived material costs have started to fall, other material costs remain high, Chief Executive James Marino said in a statement. He said cost trends should continue to improve.

    The company cut advertising and other marketing spending 20.3 percent from a year earlier, moving some spending to in-store promotions and benefiting from lower media rates.

    Alberto does not give specific profit forecasts, but in April, Marino said the company was still aiming for 2009 organic sales growth in a mid-single-digit percentage range.

    In June, the company announced plans to cut about 160 jobs as it trims manufacturing and warehouse space in California.

    Alberto’s shares fell 50 cents, or about 2 percent, to $25.08 in morning trading. Through Friday, the shares had risen more than 4 percent so far this year, outpacing the nearly 10 percent decline in shares of larger rival Procter & Gamble Co (PG.N). (Reporting by Jessica Wohl; editing by John Wallace and Maureen Bavdek)

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