Go Back   ManagementParadise.com | Management & Business Education Learning Platform PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT > Financial Management

Financial Analysis of Alberto-Culver Company

Discuss Financial Analysis of Alberto-Culver Company within the Financial Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Alberto-Culver (NYSE: ACV) owns cosmetics brands such as Nexxus, TRESemme, Alberto VO5, and St. I'ves. Nexxus and TRESemme are responsible ...

Reply

 

Thread Tools Display Modes
Financial Analysis of Alberto-Culver Company
Old
 (1 (permalink))
Abhijeet S
abhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to behold
 
abhishreshthaa
Operations Manager at Management Paradise
Management Paradise Guru
 
Status: Offline
Posts: 7,045
Join Date: May 2010
Financial Analysis of Alberto-Culver Company - February 18th, 2011

Alberto-Culver (NYSE: ACV) owns cosmetics brands such as Nexxus, TRESemme, Alberto VO5, and St. I'ves. Nexxus and TRESemme are responsible for the majority of the company's revenue.[1]

TRESemme and Nexxus were acquired by ACV, and are now the company's best-performing brands. [2] Though Alberto-Culver Company is significantly smaller in size and revenues than its competitors Procter & Gamble Company (PG), and L'oreal (LRLCY), it has recorded greater growth than the rest of the industry. [3]

The company's top 5 customers (the largest of which is Wal-Mart) represent 30% of sales. [4]

Company Overview

Business & Financial Metrics[5]
In 2009, ACV generated a net income of $117.8 million on revenues of $1.43 billion. This represents an 11.1% increase in net income and a 0.7% decrease in total revenues from 2008, when the company earned $106.0 million on $1.44 billion in revenue.

Business Segments[6]
ACV has two reportable geographic business segments: "United States" and "International." In 2009, 63.9% of the company's revenue came from the United States and 36.1% came from international customers.

Key Trends and Forces

Limited Number of Customers Represent Large Portion of Net Sales
Contents
1 Company Overview
1.1 Business & Financial Metrics[5]
1.2 Business Segments[6]
2 Key Trends and Forces
2.1 Limited Number of Customers Represent Large Portion of Net Sales
2.2 Growth has been Primarily Driven by Acquisitions but may be Risky for Long Term
2.3 Resilient Brands Amidst Looming Recession
3 Competition
4 References
A significant portion of the company's net sales comes from a small. concentrated number of large customers with Alberto-Culver's top 5 customers representing 30%. Its largest customer is Wal-Mart Stores (WMT) and the product decisions of the mass merchandiser directly affect Alberto-Culver and its sales. Particularly because long-term contracts are not used and sales are made on a store-to-store basis, the relationships and shelving decisions of Wal-Mart and other mass retailers that represent a significant portion of Alberto-Culver's sales has a powerful impact on the success and future growth of the company,[7]

Growth has been Primarily Driven by Acquisitions but may be Risky for Long Term
Alberto-Culver has made acquisitions of small companies with a high capacity for growth such as Nexxus and TRESemme and re-released them with improved marketing and brand image. Alberto-Culver's acquisitions, particularly TRESemme and Nexxus have boosted the company's sales. Nexxus has also helped fuel increased sales figures. Alberto-Culver's original products of Alberto VO5 had a decrease in sales which offset some of the increases made by their acquisitions.[8] With acquisitions of companies being an integral part of Alberto-Culver's growth, the company runs risks of failing to continue to successfully choose and acquire companies with high growth, or the inability to effectively assimilate those companies.[9]

Resilient Brands Amidst Looming Recession
The unsteady economy has dramatically decreased consumer confidence, with Consumer Price Index (CPI) hitting its lowest since 1992. [10] Still, Alberto-Culver has managed its restructuring and growth to maintain a strong balance sheet and record-high earnings in their third quarter, even after spending over $220 million in cash to repurchase shares and retire debt.[11] In order to ensure continued growth, the company is consolidating its North-American supply chain and has closed their Puerto Rico manufacturing plant. The company is continuing growth of TRESemme by expanding internationally with a launch of TRESemme in Spain, which has had promising initial sales. Growth of the St. Ive's brand in latin America has also driven international sales.[12] Nexxus and Alberto VO5 had constant, if not dramatic sales in the single digits. All brands contributed to Alberto-Culver's strong numbers in the third quarter.

Competition

Some of ACV's competitors include Procter & Gamble Company (PG), Unilever (UL), L'oreal (LRLCY), and JOHNSON & JOHNSON (JNJ).

Procter & Gamble Company (PG) is the world's leader in production of household and personal products with 23 brands. They have continued to grow and maintain their leadership position through aggressive R&D spending that overshadows all of their smaller competitors.[13]

Unilever (UL) sells household and food products such as tea through their prominent brand [Lipton]. Their skincare and hair care brands include Suave, Dove, Thermasilk, and Sunsilk. This European-based company makes most of its sales in the Americas, Africa, and Asia. They have been struggling with increasing commodity prices as well as stiff competition from competitor Procter & Gamble Company (PG), which continues to record increasing sales despite high production costs.[14]
L'oreal (LRLCY) holds the top position as the largest beauty and health care products producer in the world. The largest driver of their sales is hair and skin care products and the company has acquired The Body Shop, Beauty Alliance, and YSL Beaute. L'Oreal's cosmetic branch, consisting of hair care, make up, colorants, skin care, and perfume products made up the large majority of its revenues.[15] Effectively expanding into emerging markets, targeting aging populations that demand more cosmetics products and exploring the male cosmetics market, L'Oreal has maintained their industry market share leadership through continuous R&D and specialization.[16]
Johnson & Johnson (JNJ) is the second largest health care products manufacturer based in the United States. JNJ owns successful brands such as Tylenol, Band-Aid, and Neutrogena and acquired Pfizer's Consumer Healthcare Division in 2006, making Johnson & Johnson a dominant player in the consumer healthcare products industry.[17]
Advertisements



Help Others > Network > Grow


Work with us part time/full time as forum moderator. Email us your resume on careers @ managementparadise.com PLS PRESS THANKS BUTTON IF U LIKED MY POST.


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
Friends: (0)
Reply With Quote
Reply

Bookmarks

Tags
accounting analysis, alberto-culver, annual statement, balance sheet, business finance, business valuation, debt instruments, finance companies, financial analysis, financial analysis report, financial analysts, financial ratio, financial statement, fundamental analysis, funds management, hedge funds, income statement, mutual funds, net income, p&l account, personal finance, private equity, public finance, return on equity, us company finance
Related to Financial Analysis of Alberto-Culver Company
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Marketing Strategy of Alberto-Culver Anjali Khurana Marketing Management 1 May 19th, 2017 05:23 PM
Financial Analysis of Mosaic Company Abhijeet S Financial Management 0 February 18th, 2011 10:50 AM
Financial Analysis of Monsanto Company Abhijeet S Financial Management 0 February 18th, 2011 10:50 AM
Financial Analysis of Manitowoc Company Abhijeet S Financial Management 0 February 18th, 2011 10:50 AM
Financial Analysis of 3M Company Netra Shetty Financial Management 0 February 8th, 2011 03:59 PM
 


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are Off


ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.



Search Engine Optimization by vBSEO ©2011, Crawlability, Inc.