Alberto-Culver Co.’s fiscal first-quarter earnings rose 30 percent, missing Street estimates, as currency fluctuations and rising input costs dampened sales growth.
The personal-care product maker’s shareholders approved its $3.7 billion acquisition by consumer products giant Unilever PLC last month after it conceded in November to some institutional investors’ demands for the company to make itself more amenable to competing offers.
If approved by U.S. regulators, the pending merger sets the stage for more intense competition in the hair and skin-care sector by vaulting Unilever to a more powerful position in the U.S. beauty industry. Most household products companies — fighting a consumer spending slump in the developed world — are trying to use their scale to give them an edge.
The company last month bought U.K.-based Simple Health & Beauty Group Ltd., adding to a product line that includes the TRESemme, Alberto VO5, Nexxus and St. Ives brands.
For the quarter ended Dec. 31, Alberto-Culver reported a profit of $47.6 million, or 47 cents a share, up from $36.6 million, or 37 cents, a year earlier. Excluding restructuring impacts, acquisition costs and other charges, earnings from continuing operations climbed to 52 cents from 46 cents.
Revenue rose 12 percent, to $405.3 million, as organic sales, which exclude currency fluctuations, acquisitions and divestitures, grew 4.4 percent.
Analysts polled by Thomson Reuters had forecast earnings of 54 cents a share on revenue of $411 million.
Gross margin edged down to 53.2 percent from 53.4 percent due to higher input costs.
U.S. sales grew 2.8 percent in the first quarter. International sales surged 25 percent, largely due to currency fluctuations and Alberto-Culver’s acquisitions.
Shares closed Friday at $37.17 and were inactive premarket. The stock has hovered around $37.50 a share since Unilever offered that price in September.
