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Alberto Culver Reports Flat Fiscal 2009

Posted: October 26, 2009

Alberto Culver Company announced fourth quarter net sales of $385.2 million, compared to $386.0 million in the prior year quarter. Reported net sales were reduced 5.0% by foreign currency fluctuations. Net sales for the fiscal 2009 decreased 0.7% to $1.43 billion from $1.44 billion in the prior year. Reported net sales were reduced 8.1% by foreign currency fluctuations.

"Fiscal year 2009 was another very successful year for Alberto Culver," said V. James Marino, president and CEO, Alberto Culver. "We generated strong organic sales and earnings growth in a very difficult environment, continued to strengthen our hair care market shares and we're exiting fiscal year 2009 in a very strong financial position."

The fourth quarter organic sales growth rate was 2.7%. In the U.S., reported sales grew 8.3% driven by the acquisition of Noxzema and strong growth in TRESemme and St. Ives, partly offset by lower Alberto VO5 sales, mainly due to discontinued styling items. International sales on a reported basis decreased 11.9% (although sales were flat when excluding the impact of foreign currency fluctuations). The international segment continued to benefit from the successful expansion of TRESemme, the launch of Nexxus in Canada and double-digit local currency growth in St. Ives. These increases were offset by a decline in Alberto VO5 sales due to the timing of promotional events and heightened competitive activity, particularly in Europe, and weakness in multicultural brands.

The company's gross profit margin was 52.3% in the fourth quarter compared to 51.7% in the prior year quarter. "As expected, in the September quarter, we saw the results of our cost savings efforts coupled with the benefit of lower oil derived raw material costs," said Marino.

Advertising and other marketing investments in the fourth quarter increased 8.1% (despite a 500 basis point reduction from foreign currency fluctuations) to $76.2 million compared to $70.4 million in the prior year quarter. The significant increase resulted primarily from investments in TRESemme and Nexxus, partially offset by lower Alberto VO5 investments in the U.S. due to significant prior year spending to support Extreme Styling. "During the quarter and the year, we benefited from lower media rates across markets, and we continued to significantly invest in our core beauty care brands to strengthen our market shares and drive growth," said Marino.