Alberto-Culver Co. shares slipped Wednesday after an analyst lowered his growth targets for the beauty care products maker.
Dara Mohsenian of JPMorgan expects the company's revenue in its fiscal third quarter to grow 7 percent, down from a prior target of 8.6 percent excluding discontinued operations, as sales in the hair care category, measured by data culled from store scanners, were soft in mid-June.
Alberto-Culver, of Melrose Park, Ill., makes Tresemme and Nexxus shampoo, among other products.
The analyst expects the company will earn 28 cents per share in the quarter, in line with the consensus estimate, according to a Thomson Financial survey.
"We don't believe recent scanner data weakness is a big concern, given we view it as transitory and related to a short-term pantry effect as consumers use up existing inventory," the analyst wrote.
Over the long term, the analyst, who rates the stock "Overweight," said Alberto-Culver will likely benefit from its strong balance sheet, sales momentum for its high-margin brands and possible margin expansion from a new plant.
Mohsenian also said Alberto-Culver is a potential acquisition candidate "given a lack of U.S. personal care assets of its size and recent industry consolidation."
Shares of Alberto-Culver declined $1.32, or 5.1 percent, to $24.64. The stock is up nearly 6 percent in the year to date, versus a 13 percent decline in the S&P 500 Index over the same time.
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