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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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 March 31, 2003, the company had 26,321,119 shares of Class A common stock and 32,340,240 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 March 31, 2003 and 2002

(in thousands, except per share data)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Consolidated Statements of Earnings

Six Months Ended March 31, 2003 and 2002

(in thousands, except per share data)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2003 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

Six Months Ended March 31, 2003 and 2002

(dollar amounts in thousands)

See Notes to Consolidated Financial Statements.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1) BASIS OF PRESENTATION

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.

(2) STOCKHOLDERS’ EQUITY

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 March 31, 2003, the company had purchased 331,700 Class A shares under this re-authorization at a total cost of $15.1 million. A total of 1,368,300 Class A shares remain available for purchase under this program as of March 31, 2003.

During the six months ended March 31, 2003 and 2002, the company acquired $1.8 million 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.

(3) WEIGHTED AVERAGE SHARES OUTSTANDING

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

Stock options for 1,235,100 shares were excluded from the computation of diluted earnings per share for the three months and six months ended March 31, 2003 as the options’ exercise prices were greater than the average market price and, therefore, were anti-dilutive. No stock options were anti-dilutive for the three months or six months ended March 31, 2002.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(4) ACCOUNTING FOR STOCK-BASED COMPENSATION

The Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” requires either the adoption of a fair value based method of accounting for stock-based compensation or the continuance of the intrinsic value method with pro-forma disclosures as if the fair value method was adopted. The company has elected to continue measuring compensation expense for its stock-based plans using the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting or Stock Issued to Employees,” and, accordingly, no compensation cost related to stock options has been recognized in the consolidated statements of earnings.

Had compensation expense for these stock option plans been determined based upon the fair value of stock options on the dates of grant and recognized over the vesting period consistent with SFAS No. 123, the company’s pro-forma net earnings and net earnings per share for the three and six months ended March 31, 2003 and 2002 would have been as follows (in thousands, except per share amounts):

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(5) COMPREHENSIVE INCOME

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

(6) BUSINESS SEGMENT INFORMATION

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 and six months ended March 31, 2003 and 2002 is as follows (in thousands):

There has not been a material change in the identifiable assets of the Global Consumer Products segment as of March 31, 2003 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)

(7) GOODWILL AND TRADE NAMES

The change in the carrying amount of goodwill by operating segment for the six months ended March 31, 2003 is as follows (in thousands):

Indefinite-lived trade names by operating segment at March 31, 2003 and September 30, 2002 were as follows (in thousands):

The increase in indefinite-lived trade names during the six months ended March 31, 2003 was due to the weakening of the U.S. dollar versus certain foreign currencies, primarily the Swedish krona and Argentine peso.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS

Second Quarter and Six Months Ended March 31, 2003 versus Second Quarter and Six Months Ended March 31, 2002

The company achieved record second quarter net sales of $707.0 million in fiscal year 2003, up $49.2 million or 7.5% over the comparable period of the prior year. For the six-month period ending March 31, 2003, net sales reached a new high of $1.40 billion, representing a 10.4% increase compared to last year’s six-month period. Fiscal year 2003 sales were increased by the effect of foreign exchange rates. Had foreign exchange rates this year been the same as the second quarter and first half of fiscal 2002, sales would have been 2.4% and 1.4% lower than reported in the second quarter and first half of fiscal year 2003, respectively.

Net earnings were $37.9 million for the three months ended March 31, 2003 or 15.9% higher than the prior year’s second quarter net earnings of $32.7 million. Basic earnings per share of 65 cents in the second quarter of fiscal year 2003 were 8 cents or 14.0% higher than the same period of fiscal year 2002. Diluted earnings per share for the current quarter increased 14.5% to 63 cents from 55 cents in the same period of the prior year.

Net earnings for the six months ended March 31, 2003 were $73.9 million or 19.3% higher than the prior year’s first half net earnings of $61.9 million. Basic earnings per share of $1.27 in fiscal year 2003 were 18 cents or 16.5% higher than the same period of fiscal year 2002. Diluted earnings per share increased 17.1% to $1.23 from $1.05 in the first half of fiscal year 2002.

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 10.1% and 9.0% in the second quarter and first six months of fiscal year 2003, respectively. The second quarter and first half increases were primarily due to higher sales of St. Ives Swiss Formula skin care products and the TRESemme and Alberto VO5 lines of hair care products. Fiscal year 2003 sales were increased by the effect of foreign exchange rates. Had foreign exchange rates this year been the same as the second quarter and first six months of fiscal 2002, Global Consumer Products sales would have been 4.7% and 2.5% lower than reported in the second quarter and first half of fiscal year 2003, respectively.

The “Specialty distribution—Sally” (“Sally”) business segment achieved sales increases of 5.9% for the second quarter and 10.9% for the first six months of fiscal year 2003. The sales increases were mainly attributable to the expansion of Sally’s full-service operations, higher sales for established Sally Beauty Company outlets and the addition of stores during the year. First half sales also benefited from the inclusion of a full six months of operations for Armstrong-McCall, acquired in December 2001, versus only three months in the prior year.

Cost of products sold as a percentage of net sales was 49.4% for the second quarter and 50.0% for the first six months of fiscal year 2003 compared to 51.2% for the second quarter and 50.9% for the first half of the prior year. The decreases in the cost of products sold percentage in the second quarter and first half of fiscal year 2003 were primarily attributable to cost savings programs and increased sales of higher margin products for Alberto-Culver Consumer Products Worldwide and improved vendor pricing and lower store inventory shrinkage for Sally.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

Compared to the prior year, advertising, marketing, selling and administrative expenses in fiscal year 2003 increased $28.5 million or 10.8% for the second quarter and $57.8 million or 11.2% for the first six months. The increases 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 expense was $59.0 million for the second quarter and $108.5 million for the first half of fiscal year 2003 versus $47.2 million for the second quarter and $93.3 million for the first half of fiscal year 2002. The increases primarily resulted from higher advertising expenditures for St. Ives Swiss Formula skin care products, TRESemme hair care products, Alberto V05 hair care products and Mrs. Dash salt-free seasoning blends.

Net interest expense decreased $421,000 in the second quarter and $168,000 in the first half of fiscal year 2003. The reductions in net interest expense primarily resulted from the amortization of a deferred gain resulting from the termination of an interest rate swap in July, 2002. The first half decrease was partially offset by lower interest income due to reduced interest rates on investments.

The provision for income taxes as a percentage of earnings before income taxes was 36.0% for the second quarter and first half of fiscal year 2003 compared to 35.0% for the second quarter and first half of fiscal year 2002. The higher tax rate is mainly due to the mix of foreign taxable earnings.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

FINANCIAL CONDITION

March 31, 2003 versus September 30, 2002

Working capital at March 31, 2003 was $611.7 million, an increase of $87.9 million from $523.8 million at September 30, 2002. The resulting ratio of current assets to current liabilities was 2.43 to 1.00 at March 31, 2003 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 increased $29.4 million during the first six months of fiscal year 2003 primarily due to cash flow provided by operating activities and cash received from the exercise of stock options. These cash inflows were partially offset by cash paid for capital expenditures, cash dividends and stock purchased for treasury.

Inventories increased $24.9 million during the first half of fiscal year 2003 primarily due to the growth of the Global Consumer Products business, including higher inventories related to planned promotions and new SKUs, the growth of the Sally Beauty business and the weakening of the U.S. dollar versus certain foreign currencies.

Accounts payable decreased $15.9 million during the first half of fiscal year 2003 primarily due to the timing of inventory purchases and vendor payments.

Accrued expenses decreased $12.9 million during the first six months of fiscal year 2003 primarily due to payments under various incentive plans.

“Accumulated other comprehensive income—foreign currency translation” decreased $16.2 million during the first half 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.

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. The company implemented the interim disclosure requirements of SFAS No. 148 in the second quarter of fiscal year 2003.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

NEW ACCOUNTING PRONOUNCEMENTS (continued)

In January, 2003, the FASB’s Emerging Issues Task Force (“EITF”) finalized Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor,” which addresses the accounting by a customer for consideration given by a vendor. EITF Issue No. 02-16 standardizes the accounting treatment for these types of arrangements by requiring that consideration received from a vendor be reflected as a reduction in the purchase price of the item, except for reimbursement of specific, incremental expenses incurred by the customer to sell a vendor’s products, which should be reflected as a reduction in the applicable expense item (“Issue 1”). EITF Issue No. 02-16 also requires that rebates or refunds from vendors that are earned based upon a specified level of purchases, or continued purchases over a specified period of time, should be accrued if it is probable they will be earned and can be estimated (“Issue 2”). As required by EITF Issue No. 02-16, the company implemented Issue 1 in the second quarter of fiscal year 2003 and Issue 2 for arrangements entered into or modified after November 21, 2002. The adoption of EITF No. 02-16 did not have a material effect on the company’s consolidated financial statements.

In November, 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” (“FIN 45”). FIN 45 requires guarantors to recognize a liability for the obligation it has undertaken in issuing a guarantee, including the ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. FIN 45 also requires certain interim and annual disclosures regarding guarantees. The company adopted the provisions of FIN 45 in the second quarter of fiscal year 2003. The adoption of FIN 45 did not have a material impact on the company’s consolidated financial statements.

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 three or six months ended March 31, 2003.

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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 or six months ended March 31, 2003.

ITEM 4. CONTROLS AND PROCEDURES

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

PART II

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the annual meeting of stockholders on January 23, 2003, Carol L. Bernick, Jim Edgar, Leonard H. Lavin and Robert H. Rock were elected as directors of the company with terms expiring at the annual meeting of stockholders in 2006. Mrs. Bernick received a Class A and Class B Common stockholder vote of 22,086,015 and 23,359,050 shares “for” and 2,556,029 and 5,793,070 shares “withheld,” respectively. Mr. Edgar received a Class A and Class B Common stockholder vote of 24,376,562 and 27,632,118 shares “for” and 265,482 and 1,520,002 shares “withheld,” respectively. Mr. Lavin received a Class A and Class B Common stockholder vote of 22,085,971 and 23,342,450 shares “for” and 2,556,073 and 5,809,670 shares “withheld,” respectively. Mr. Rock received a Class A and Class B Common stockholder vote of 24,377,080 and 27,634,417 shares “for” and 264,964 and 1,517,703 shares “withheld,” respectively.

A.G. Atwater, Jr., Sam J. Susser, William W. Wirtz, John A. Miller and James G. Brocksmith continue as directors and their terms expire at the annual meeting of stockholders in 2004. Howard B. Bernick, King Harris, Bernice E. Lavin and Allan B. Muchin continue as directors with terms expiring at the annual meeting of stockholders in 2005.

A. Robert Abboud retired as a director when his term expired on January 23, 2003.

Stockholders at the annual meeting also voted on the proposed approval of the company’s Employee Stock Option Plan of 2003. The plan was approved by a Class A and Class B stockholder vote of 18,705,590 and 22,600,257 shares “for;” 3,796,751 and 4,461,496 shares “against;” 14,652 and 446,320 shares “abstaining;” and 2,125,051 and 1,644,047 shares of “broker non-votes,” respectively.

Stockholders at the annual meeting also voted on the proposed approval of the company’s Stock Option Plan for Non-Employee Directors of 2003. The plan was approved by a Class A and Class B stockholder vote of 18,869,012 and 23,753,458 shares “for;” 3,622,231 and 3,289,054 shares “against;” 25,751 and 465,562 shares “abstaining;” and 2,125,050 and 1,644,046 shares of “broker non-votes,” respectively.

Stockholders at the meeting also voted on the proposed approval of the Alberto-Culver Company 2003 Restricted Stock Plan. The plan was approved by a Class A and Class B stockholder vote of 16,258,361 and 19,786,367 shares “for;” 6,238,722 and 7,268,383 shares “against;” 19,911 and 453,323 shares “abstaining;” and 2,125,050 and 1,644,047 shares of “broker non-votes,” respectively.

Stockholders at the annual meeting also voted on the proposed re-approval of the company’s 1994 Shareholder Value Incentive Plan, as amended. The plan was approved by a Class A and Class B stockholder vote of 22,137,532 and 26,709,067 shares “for;” 360,901 and 358,085 shares “against;” 18,561 and 440,921 shares “abstaining;” and 2,125,050 and 1,644,047 shares of “broker non-votes,” respectively.

Stockholders at the annual meeting also voted on the proposed approval of the company’s Restated Certificate of Incorporation, as amended. The Restated Certificate of Incorporation was approved by a Class A and Class B stockholder vote of 22,038,340 and 25,230,075 shares “for;” 460,412 and 1,926,712 shares “against;” 18,242 and 351,286 shares “abstaining;” and 2,125,050 and 1,644,047 shares of “broker non-votes,” respectively.

Class A common stock has one-tenth vote per share and Class B common stock has one vote per share.

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ALBERTO-CULVER COMPANY AND SUBSIDIARIES

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

* This exhibit is a management contract or compensatory plan or arrangement of the registrant.

(b) Reports on Form 8-K:

               No report on Form 8-K was filed by the registrant during the quarter ended March 31, 2003.

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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.

May 8, 2003

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CERTIFICATION PURSUANT TO

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

I, Howard B. Bernick, certify that:

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CERTIFICATION PURSUANT TO

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

I, William J. Cernugel, certify that:

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