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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

December 31, 2002

-OR-

Commission File No. 1-5050

ALBERTO-CULVER COMPANY

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (708) 450-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES  x  NO  ¨

At December 31, 2002, the company had 26,076,433 shares of Class A common stock and 32,331,640 shares of Class B common stock outstanding.

PART I

ITEM 1. FINANCIAL STATEMENTS

ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Consolidated Statements of Earnings

Three Months Ended December 31, 2002 and 2001

(in thousands, except per share data)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2002 and September 30, 2002

(dollars in thousands, except share data)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Three Months Ended December 31, 2002 and 2001

(dollar amounts in thousands)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The consolidated financial statements contained in this report have not been audited by independent public accountants, except for balance sheet information presented at September 30, 2002. However, in the opinion of the company, the consolidated financial statements reflect all adjustments, which include only normal adjustments, necessary to present fairly the data contained therein. The results of operations for the periods covered are not necessarily indicative of results for a full year. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation.

On January 23, 2003, the company announced an increase in the cash dividend on Class A and Class B common stock, raising the quarterly dividend 16.7% to 10.5 cents per share or 42 cents annually from 9 cents per share or 36 cents annually. The cash dividend is payable February 20, 2003 to stockholders of record on February 3, 2003.

During fiscal years 1998 and 1999, the Board of Directors authorized the company to purchase up to 9.0 million shares of its Class A common stock. Prior to the fourth quarter of fiscal year 2002, the company had purchased 7.3 million Class A common shares under this program at a total cost of $162.9 million with the last purchase occurring in October, 1999. In July, 2002, the Board of Directors re-authorized the company to purchase up to 1.7 million shares of Class A common stock remaining under this program. As of December 31, 2002, the company had purchased 311,700 Class A shares under this re-authorization at a total cost of $14.2 million. A total of 1,388,300 Class A shares remain available for purchase under this program as of December 31, 2002.

During the three months ended December 31, 2002 and 2001, the company acquired $871,000 and $28.0 million, respectively, of Class A and Class B common shares surrendered by employees in connection with the exercises of stock options and the payment of withholding taxes as provided under the terms of certain incentive plans. Shares acquired under these plans are not subject to the above-mentioned stock repurchase program.

The following table provides information about basic and diluted weighted average shares outstanding (in thousands):

No stock options were anti-dilutive for the three months ended December 31, 2002 or 2001.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Comprehensive income consists of net earnings and foreign currency translation adjustments as follows (in thousands):

Effective October 1, 2002, the company’s consumer products business was reorganized into two divisions. A new division, Alberto-Culver Consumer Products Worldwide, is comprised of the former Alberto-Culver North America business segment and the former Alberto-Culver International business segment excluding the operations of Cederroth International. The second division is Cederroth International, which manufactures, markets and distributes beauty and health care products throughout Scandinavia and in Europe. Beginning in fiscal year 2003, the company has two segments for external financial reporting purposes: Global Consumer Products, which includes the two aforementioned consumer products divisions, and Specialty Distribution – Sally, which is the same segment as previously reported. Prior year information has been reclassified to conform to the new segment presentation.

Segment data for the three months ended December 31, 2002 and 2001 is as follows (in thousands):

There has not been a material change in the identifiable assets of the Global Consumer Products segment as of December 31, 2002 versus the combined identifiable assets of the previously reported Alberto-Culver North America and Alberto-Culver International segments as of September 30, 2002.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The change in the carrying amount of goodwill by operating segment for the three months ended December 31, 2002 is as follows (in thousands):

Indefinite-lived trade names by operating segment at December 31, 2002 and September 30, 2002 were as follows (in thousands):

The increase in indefinite-lived trade names during the three months ended December 31, 2002 was due to the weakening of the U.S. dollar versus certain foreign currencies.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

RESULTS OF OPERATIONS

First Quarter Ended December 31, 2002 versus First Quarter Ended December 31, 2001

The company achieved record first quarter net sales of $696.8 million in fiscal year 2003, up $82.5 million or 13.4% over the comparable period of the prior year.

Net earnings were $36.0 million for the three months ended December 31, 2002 or 22.9% higher than the prior year’s first quarter net earnings of $29.3 million. Basic earnings per share of 62 cents in the first quarter of fiscal year 2003 were 10 cents or 19.2% higher than the same period of fiscal year 2002. Diluted earnings per share for the current quarter increased 20.0% to 60 cents from 50 cents in the same period of the prior year.

Effective October 1, 2002, the company’s consumer products business was reorganized into two divisions. A new division, Alberto-Culver Consumer Products Worldwide, is comprised of the former Alberto-Culver North America business segment and the former Alberto-Culver International business segment excluding the operations of Cederroth International. The second division is Cederroth International, which manufactures, markets and distributes beauty and health care products throughout Scandinavia and in Europe. Beginning in fiscal year 2003, the company has two segments for external financial reporting purposes: Global Consumer Products, which includes the two aforementioned consumer products divisions, and Specialty Distribution – Sally, which is the same segment as previously reported. Prior year information has been reclassified to conform to the new segment presentation.

Compared to the same period of the prior year, sales of Global Consumer Products increased 7.9% in the first quarter of fiscal year 2003. The increase was primarily due to higher sales of St. Ives Swiss Formula skin care products and TRESemmé and Alberto VO5 hair care products. Had foreign exchange rates this year been the same as the first quarter of fiscal 2002, Global Consumer Products sales would have increased 7.7%.

The “Specialty distribution – Sally” business segment achieved a sales increase of 16.4% for the first quarter of fiscal year 2003. The increase was mainly attributable to the expansion of Sally’s full-service operations, including the December, 2001 acquisition of Armstrong-McCall, higher sales for established Sally Beauty Company outlets and the addition of stores during the year. At December 31, 2002, Sally Beauty Company had 2,743 stores, including 139 franchise stores, offering a full range of professional beauty supplies.

Cost of products sold as a percentage of net sales remained unchanged at 50.6% for the first quarter of fiscal year 2003 compared to the first quarter of the prior year.

Compared to the prior year, advertising, marketing, selling and administrative expenses in fiscal year 2003 increased $29.4 million or 11.6% for the first quarter. The increase primarily resulted from the higher selling and administrative costs associated with the growth of the Sally Beauty Company business and higher expenditures for advertising and marketing.

Advertising and marketing expenditures were $49.4 million and $46.1 million in fiscal years 2003 and 2002, respectively. The increase primarily resulted from higher domestic advertising expenditures for St. Ives Swiss Formula lotions.

Net interest expense in fiscal year 2003 increased $253,000 for the first quarter compared to the same period of the prior year. The increase was primarily attributable to a decrease in interest income mainly due to lower interest rates on investments.

The provision for income taxes as a percentage of earnings before income taxes was 36.0% for the first quarter of fiscal year 2003 compared to 35.0% for the first quarter of the prior year. The higher 2003 tax rate is mainly due to the mix of taxable earnings.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

FINANCIAL CONDITION

December 31, 2002 versus September 30, 2002

Working capital at December 31, 2002 was $569.3 million, an increase of $45.5 million from $523.8 million at September 30, 2002. The resulting ratio of current assets to current liabilities was 2.36 to 1.00 at December 31, 2002 compared to 2.14 to 1.00 at September 30, 2002. The increase in working capital and the ratio of current assets to current liabilities was primarily due to net working capital generated from the growth of the company, partially offset by cash outlays for capital expenditures, cash dividends and purchases of treasury shares.

Cash and cash equivalents decreased $21.8 million during the first quarter of fiscal year 2003 primarily due to cash flow used by operating activities and cash paid for capital expenditures, stock purchased for treasury and cash dividends, partially offset by cash received from the exercise of stock options.

Inventories increased $26.2 million to $548.4 million during the first quarter of fiscal year 2003 primarily due to the growth of both the Sally Beauty and Global Consumer Products businesses.

Accounts payable decreased $19.2 million to $214.8 million during the first three months of fiscal year 2003 mainly due to the timing of inventory purchases and vendor payments.

Accrued expenses decreased $32.3 million during the first quarter of fiscal year 2003 primarily due to payments under various incentive plans and semi-annual interest payments on the company’s $320 million of public debt securities.

Income taxes payable and deferred income taxes increased $13.1 million or 24.8% during the first three months of fiscal year 2003 primarily due to the timing of tax payments.

“Accumulated other comprehensive income – foreign currency translation” decreased $9.9 million during the first quarter of fiscal year 2003 mainly due to the weakening of the U.S. dollar versus certain foreign currencies, primarily the British pound and Swedish krona.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter of fiscal year 2003, the company’s operating activities used $8.9 million of cash primarily due to the increase in inventories and decreases in accounts payable and accrued expenses as discussed above in “Financial Condition.” The company expects that fiscal year 2003 operating activities will generate cash flows sufficient to support the business. For the three-year period ended September 30, 2002, the company’s operating activities provided cash totaling $516.0 million.

NEW ACCOUNTING PRONOUNCEMENTS

In December, 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure – an amendment of SFAS No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The company is required to comply with the additional disclosure requirements of SFAS No. 148 in its annual financial statements for the year ended September 30, 2003 and must also provide the disclosures in its quarterly reports for interim periods beginning in the second quarter of fiscal year 2003.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

CRITICAL ACCOUNTING POLICIES

The company’s significant accounting policies are described in note 1 of the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2002. A discussion of critical accounting policies is included in Management’s Discussion and Analysis of Results of Operations and Financial Condition in the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2002. There were no significant changes in the company’s critical accounting policies during the quarter ended December 31, 2002.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

FORWARD - LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein, if any, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on management’s current expectations and assessments of risks and uncertainties and reflect various assumptions concerning anticipated results, which may or may not prove to be correct. Some of the factors that could cause actual results to differ materially from estimates or projections contained in such forward-looking statements include: the pattern of brand sales, including variations in sales volume within periods; competition within the relevant product markets, including the ability to successfully introduce new products, ensuring product quality, pricing, promotional activities, introduction of competing products and continuing customer acceptance of existing products; loss of distributorship rights; risks inherent in acquisitions and strategic alliances; the loss of one or more key employees; the effects of a prolonged United States or global economic downturn or recession; changes in costs, including changes in labor costs, raw material prices or advertising and marketing expenses; the costs and effects of unanticipated legal or administrative proceedings; and variations in political, economic or other factors such as currency exchange rates, inflation rates, tax changes, legal and regulatory changes or other external factors over which Alberto-Culver Company has no control. Alberto-Culver Company has no obligation to update any forward-looking statement in this Quarterly Report on Form 10-Q or any incorporated document.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the company’s market risk during the three months ended December 31, 2002.

ITEM 4. CONTROLS AND PROCEDURES

PART II

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

99(a)    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99(b)    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

No report on Form 8-K was filed by the registrant during the quarter ended December 31, 2002.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

February 7, 2003

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CERTIFICATION PURSUANT TO

RULES 13a-14 and 15d-14 OF THE EXCHANGE ACT

I, Howard B. Bernick, certify that:

Date: February 7, 2003

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CERTIFICATION PURSUANT TO

RULES 13a-14 and 15d-14 OF THE EXCHANGE ACT

I, William J. Cernugel, certify that:

Date: February 7, 2003

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