EXHIBIT 13
<TABLE>
<CAPTION>

Consolidated Statements of Earnings
Alberto-Culver Company and Subsidiaries



                                                                                  Year ended September 30,
(Dollars in thousands, except per share data) .......................       1996         1995         1994
<S>                                                                       <C>           <C>          <C> 
Net sales .............................................................   $1,590,409    1,358,219    1,216,119
Costs and expenses:
Cost of products sold .................................................      805,080      682,589      602,749
Advertising, promotion, selling and administrative ....................      673,247      584,856      536,441
 Interest expense, net of interest income
  of $3,837 in 1996, $3,414 in 1995
   and $2,779 in 1994 ................................................        12,068        6,532        5,851
   Total costs and expenses ...........................................    1,490,395    1,273,977    1,145,041
Earnings before provision for income taxes ............................      100,014       84,242       71,078
Provision for income taxes (note 6) ...................................       37,270       31,591       27,010
Net earnings ..........................................................   $   62,744       52,651       44,068

Net earnings per share:
  Primary .............................................................   $     2.22         1.89         1.57
Fully-diluted .......................................................           2.11         1.87         1.57

See accompanying notes to consolidated financial statements
</TABLE>


Consolidated Statements of Retained Earnings
Alberto-Culver Company and Subsidiaries

<TABLE>
<CAPTION>

                                                                                Year ended September 30,
(Dollars in thousands)                                                          1996         1995         1994
<S>                                                                          <C>            <C>          <C>
Retained earnings, beginning of year .....................................   $ 337,506      293,445      257,085
Net earnings .............................................................      62,744       52,651       44,068
                                                                               400,250      346,096      301,153

Cash dividends  (note 4) .................................................      (9,724)      (8,590)      (7,708)
Retained earnings, end of year ...........................................   $ 390,526      337,506      293,445

See accompanying notes to consolidated financial statements
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

Consolidated Balance Sheets
Alberto-Culver Company and Subsidiaries

(Dollars in thousands, except per share data)                                  September 30,
<S>                                                                      <C>            <C>
Assets                                                                       1996         1995
Current assets:
   Cash and cash equivalents .........................................   $  66,211      142,585
   Short-term investments ............................................       5,346        4,400
   Receivables, less allowance for doubtful
     accounts of $8,208 in 1996
      and $5,663 in 1995 (note 3) ....................................     125,718      128,482
   Inventories:
      Raw materials ..................................................      31,286       32,408
      Work-in-process ................................................       5,622        4,897
      Finished goods .................................................     251,617      211,224
         Total inventories ...........................................     288,525      248,529
   Prepaid expenses ..................................................      26,918       12,549
         Total current assets ........................................     512,718      536,545
Property, plant and equipment (note 7):
   Land ..............................................................       9,310        8,396
   Buildings .........................................................     113,775      100,954
   Machinery and equipment ...........................................     196,781      176,684
      Total property, plant and equipment ............................     319,866      286,034
   Accumulated depreciation ..........................................     143,946      128,243
      Property, plant and equipment, net .............................     175,920      157,791
Goodwill, net ........................................................     107,603       55,225
Trade names, net .....................................................      76,877       34,198
Other assets .........................................................      36,148       31,327
                                                                         $ 909,266      815,086


Liabilities and Stockholders' Equity

Current liabilities:
   Short-term borrowings .............................................   $   2,337          103
   Current maturities of long-term debt ..............................       1,313        1,286
   Accounts payable ..................................................     154,634      144,253
   Accrued expenses (note 2) .........................................     115,139       76,141
   Income taxes ......................................................      13,172       13,056
      Total current liabilities ......................................     286,595      234,839
Long-term debt (note 3) ..............................................      61,548       83,094
Convertible subordinated debentures (note 3) .........................     100,000      100,000
Deferred income taxes ................................................      16,582       15,365
Other liabilities ....................................................      19,445       10,885
Stockholders' equity (note 4): Common stock, par value $.22 per share:
      Class A authorized 25,000,000 shares; issued 13,262,624 shares .       2,918        2,918
      Class B authorized 25,000,000 shares; issued 20,944,424 shares .       4,608        4,608
   Additional paid-in capital ........................................      88,955       87,896
   Retained earnings .................................................     390,526      337,506
   Foreign currency translation (note 1) .............................     (13,428)     (12,966)
                                                                           473,579      419,962
   Less treasury stock, at cost (Class A common stock:
   1996    - 2,214,024 shares and 1995 - 2,299,618 shares;
   Class B common stock: 1996 and 1995 - 4,178,184 shares)
  (note 4) ...........................................................      48,483       49,059
      Total stockholders' equity .....................................     425,096      370,903
                                                                         $ 909,266      815,086

See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Alberto-Culver Company and Subsidiaries

(Dollars in thousands)                                          Year ended September 30,
                                                              1996          1995         1994
<S>                                                         <C>             <C>          <C>
Cash Flows from Operating Activities:
Net earnings ............................................   $  62,744       52,651       44,068
Adjustments to reconcile net earnings
 to net cash provided by operating activities:
   Depreciation .........................................      26,159       20,712       17,234
   Amortization of goodwill, trade names and other assets       6,757        3,967        3,668
   Deferred income taxes ................................      (1,858)         243         (158)
   Other, net ...........................................      (1,527)         852          447
   Cash effects of changes in:
     Receivables, net ...................................      (2,955)     (20,144)       5,995
     Inventories ........................................     (12,287)      (7,783)     (21,972)
     Prepaid expenses ...................................         302       (1,940)        (348)
     Accounts payable and accrued expenses ..............      17,930       29,420       16,815
     Income taxes .......................................      (2,520)       3,852         (347)
      Net cash provided by operating activities .........      92,745       81,830       65,402
Cash Flows from Investing Activities:
Short-term investments ..................................        (946)       4,129         (329)
Capital expenditures ....................................     (40,894)     (31,002)     (26,184)
Other assets ............................................      (7,313)      (8,143)      (6,842)
Proceeds from sales of businesses .......................      12,448         --          1,592
Payments for purchased businesses, net of acquired
 companies' cash ........................................    (130,981)     (41,635)      (7,618)
Proceeds from disposals of assets .......................       1,599        1,006        2,096
     Net cash used by investing activities ..............    (166,087)     (75,645)     (37,285)
Cash Flows from Financing Activities:
Short-term borrowings ...................................        (315)      (2,091)      (4,147)
Proceeds from issuance of long-term debt ................       5,475       45,001        5,776
Repayments of long-term debt ............................     (29,118)     (37,773)     (33,757)
Issuance of convertible subordinated debentures .........        --        100,000         --
Convertible subordinated debentures issuance costs ......        --         (2,945)        --
Proceeds from sale of receivables .......................      30,000         --           --
Proceeds from exercise of stock options .................       1,717          659          651
Cash dividends paid .....................................      (9,724)      (8,590)      (7,708)
Stock purchased for treasury ............................        (759)        --        (13,729)
     Net cash provided (used) by financing activities ...      (2,724)      94,261      (52,914)
Effect of foreign exchange rate changes on cash .........        (308)         306          883
Net increase (decrease) in cash and cash equivalents ....     (76,374)     100,752      (23,914)
Cash and cash equivalents at beginning of year ..........     142,585       41,833       65,747
Cash and cash equivalents at end of year ................   $  66,211      142,585       41,833

Supplemental Cash Flow Information:
Cash paid for:
   Interest .............................................   $  12,206        6,831        7,643
   Income taxes .........................................      42,589       26,801       27,387
Capital lease obligations assumed .......................         282        1,393          843

See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>



Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include accounts of Alberto-Culver Company
and its  subsidiaries  ("company").  All significant  intercompany  accounts and
transactions have been eliminated.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses in the
financial  statements.  Management  believes these estimates and assumptions are
reasonable.

CASH EQUIVALENTS
All highly  liquid  investments  purchased  with an  original  maturity of three
months or less are  considered to be cash  equivalents.  These  investments  are
stated at cost which approximates market value.

SHORT-TERM INVESTMENTS
Short-term  investments  are  stated at cost  which is equal to market  value at
September 30, 1996 and 1995, respectively.

INVENTORIES
Inventories  are  stated at the  lower of cost  (first-in,  first-out  method or
retail method) or market (net realizable value).

PROPERTY, PLANT AND EQUIPMENT
Property,  plant and  equipment  are carried at cost.  Depreciation  is provided
primarily on the  straight-line  method based on the  estimated  useful lives of
assets. Expenditures for maintenance and repairs are expensed as incurred.

GOODWILL AND TRADE NAMES
The cost of goodwill and trade names is amortized on a straight-line  basis over
periods  ranging  from ten to forty  years.  Management  periodically  considers
whether there has been a permanent impairment to the value of goodwill and trade
names by evaluating various factors including current operating results,  market
and  economic   conditions  and  anticipated  future  results  and  cash  flows.
Accumulated  amortization  at September 30, 1996 and 1995, was $17.3 million and
$12.9 million respectively.

FOREIGN CURRENCY TRANSLATION
Foreign  currency  balance sheet accounts are translated at rates of exchange in
effect at the balance sheet date. Results of operations are translated using the
average exchange rates during the period.

The  following  is an analysis of changes in the  foreign  currency  translation
account:

(Thousands)                                           1996               1995

Balance, beginning of year                            $(12,966)         (11,793)
         Foreign currency translation loss                (462)          (1,173)
Balance, end of year                                  $(13,428)         (12,966)


Realized  gains and losses from foreign  currency  transactions  included in the
consolidated statements of earnings resulted in losses of $17,000,  $359,000 and
$323,000 in 1996, 1995 and 1994, respectively.



ADVERTISING, PROMOTION AND MARKET RESEARCH


<PAGE>



Advertising,  promotion and market  research  costs are expensed as incurred and
amounted to $208.4 million,  $188.0 million and $178.5 million in 1996, 1995 and
1994, respectively.

INCOME TAXES
Deferred   income  taxes  are  recognized   for  the  future  tax   consequences
attributable to differences  between the financial statement carrying amounts of
existing  assets and liabilities  and their  respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which  temporary  differences are estimated to be
recovered or settled.

CALCULATION OF EARNINGS PER SHARE
Primary earnings per share are based on the weighted average shares outstanding,
including common stock  equivalents,  of 28,213,000 in 1996,  27,849,000 in 1995
and 28,042,000 in 1994.

Fully-diluted  earnings per share are  determined  by dividing net earnings plus
the interest  expense on the  convertible  subordinated  debentures  (net of tax
benefit) by the weighted  average  shares  outstanding,  including  common stock
equivalents,  after  giving  effect  for  common  shares to be  issued  assuming
conversion  of  the  convertible   subordinated  debentures  to  common  shares.
Fully-diluted  weighted  average  shares  outstanding  were  31,388,000 in 1996,
28,576,000 in 1995 and 28,081,000 in 1994.

(2) Accrued Expenses

Accrued expenses consist of the following:

(Thousands)                            1996                                1995

Compensation and be               $  48,960                              31,597
Advertising and promotions           28,085                              21,320
Other                                38,094                              23,224
                                   ---------                            -------
                                   $115,139                              76,141

(3) Debt and Other Financing Arrangements


Long-term debt, exclusive of current maturities, consists of the following:

(Thousands)                                   1996                        1995

5.5% convertible subordinated
  debentures due June, 2005                 $100,000                    100,000
Term notes payable:
9.73% due November, 1998                       ----                      20,000
6.2% due September, 2000                      20,000                     20,000
Revolving Swedish krona credit
agreements at 5.3% - 11.7%                    39,200                     40,302
Other, principally foreign borrowings
       and capitalized leases, at weighted
       average interest rates of 8.2% in
1996 and 9.0% in 1995                          2,348                      2,792
                                            ---------                  --------
                                            $161,548                    183,094


<PAGE>

Notes Continued

     Maturities  of debt for the next five years are as follows (in  thousands):
1997 - $1,313; 1998 - $1,172; 1999 - $558; 2000 - $59,433;  2001- $175 and later
- $100,210. The fair value of long-term debt approximates its recorded value.

In July, 1995, the company issued $100 million of 5.5% convertible  subordinated
debentures  maturing on June 30, 2005. The debentures are convertible into Class
A common  shares at a  conversion  rate of 30.888  shares per  $1,000  principal
amount  of  debentures  (equivalent  to  a  conversion  price  of  approximately
$32-3/8). The debentures are redeemable, in whole but not in part, at the option
of the company any time on or after June 30, 1998 at par plus accrued interest.

In August,  1996, the company  prepaid $20 million of 9.73% term notes scheduled
to  mature  in  November,  1998  and  incurred  a  prepayment  penalty.  Due  to
immateriality,  the penalty is not  reported as an  extraordinary  item,  but is
included in net interest expense.

The term notes due September,  2000 impose  restrictions  on such items as total
debt, working capital, dividend payments,  treasury stock purchases and interest
expense.  At  September  30,  1996,  the  company was in  compliance  with these
arrangements  and  $132.5  million of  consolidated  retained  earnings  was not
restricted as to the payment of dividends or purchases of treasury stock.

The company had  available  lines of credit of  approximately  $109 million with
various  banks at  September  30,  1996.  The  credit  lines,  which  require no
compensating  balances,  may be  terminated  at the  option  of the banks or the
company.

In January,  1996,  the  company  entered  into an  agreement  to sell,  without
recourse,  up to $30 million of a  designated  pool of trade  receivables  on an
ongoing basis. The agreement expires in one year and is renewable  annually upon
the mutual  consent of both  parties.  At September  30, 1996,  the facility was
fully utilized.  Costs related to this agreement are included in  administrative
expenses.

(4) Treasury Stock and Additional Paid-In Capital

Changes in treasury stock and additional  paid-in  capital during 1996, 1995 and
1994 were as follows:
                                                        Additional
                             Treasury Stock               Paid-In
(Thousands)                      Shares       Amount      Capital

Balance at September 30, 1993      5,842    $ 36,392    $ 87,262
Stock options exercised .....        (46)       (461)        190
Stock purchased for treasury         731      13,729        --
Balance at September 30, 1994      6,527      49,660      87,452
Stock options exercised .....        (33)       (399)        260
Stock issued pursuant to
  employee incentive plans ..        (16)       (202)        184
Balance at September 30, 1995      6,478      49,059      87,896
Stock options exercised .....        (84)     (1,029)        688
Stock purchased for treasury          23         759        --
Stock issued pursuant to
 employee incentive plans ...        (25)       (306)        371
Balance at September 30,1996       6,392    $ 48,483    $ 88,955

The company has two classes of common stock, both of which are listed on the New
York Stock  Exchange.  Except for voting,  dividend and conversion  rights,  the
Class A and Class B common stock are  identical.  Class A has one-tenth vote per
share and Class B has one vote per share. No dividend may be paid on the Class B
unless an equal or greater dividend is paid on the Class A, and dividends may be
paid on the Class A in excess of dividends paid, or without paying


<PAGE>



dividends, on the Class B. All, and not less than all, of the Class A may at any
time be converted into Class B on a  share-for-share  basis at the option of the
company.  The Class B is convertible into Class A on a share-for-share  basis at
the option of the holders.

Cash dividends for Class B common stock in 1996, 1995 and 1994 were $5.9 million
or $.35 per share,  $5.2 million or $.31 per share and $4.6 million or $.275 per
share,  respectively.  Cash dividends for Class A common stock in 1996, 1995 and
1994 were $3.9  million  or $.35 per share,  $3.4  million or $.31 per share and
$3.1 million or $.275 per share,  respectively.  Class A common stock  dividends
per share  have been  equal to those of Class B common  stock  since the Class A
shares were issued in April, 1986.

(5) Stock Option and Restricted Stock Plans

Pursuant  to its  stock  option  plans,  the  company  is  authorized  to  issue
non-qualified options to employees and directors to purchase a limited number of
shares of the  company's  Class A common stock at a price not less than the fair
market value of the stock on the date of grant.  Options  under the plans expire
five or ten years from date of grant and are  exercisable on a cumulative  basis
in four equal annual increments commencing one year after the date of grant.


Shares under option at September 30, 1996 are summarized as follows:

           Shares                    Per Share                  Total
 Year      Under                     Option                     Option Price
Granted    Option                    Price                      (Thousands)

 1989      4,250                        $13.25                   $  56
 1990     69,366                         18.75                   1,301
 1991     33,250                         19.88                     661
 1992    109,800                 21.50 - 23.65                   2,371
 1993    136,875                 23.69 - 26.06                   3,252
 1994    183,750                 19.50 - 21.63                   3,616
 1995    462,358                         23.69                  10,952
 1996    494,800                 26.75 - 34.13                  13,462

       1,494,449                                               $35,671


Options for 83,442  shares were  exercised  in 1996  whereas  options for 32,634
shares  were  exercised  in the prior year.  During  1996 and 1995,  options for
52,675 and 35,525 shares,  respectively,  were  terminated.  Options for 526,787
shares were exercisable at September 30, 1996.

The  company  is also  authorized  to grant  shares  of Class A common  stock to
employees  under its  restricted  stock plan.  The  restricted  shares vest on a
cumulative basis in four equal annual  installments  commencing four years after
the date of grant. At September 30, 1996,  there were 40,500  restricted  shares
outstanding.


<PAGE>

Notes Continued


(6) Income Taxes

The provisions for income taxes consist of the following:
(Thousands)                         1996                1995              1994

Current:
  Federal                         $27,651              20,820            19,477
  Foreign                           5,566               5,310             3,768
  State                             5,911               5,218             3,923
                                  -------              -------           -------
                                   39,128              31,348            27,168

Deferred:
  Federal                          (2,349)               (213)           (1,315)
  Foreign                           1,268                 561               974
  State                              (777)               (105)              183
                                   (1,858)                243              (158)
                                  --------             -------           -------
                                  $37,270              31,591            27,010


The  difference  between  the  effective  income tax rate and the United  States
statutory federal income tax rate is summarized below:

                                     1996                1995              1994

Statutory tax rate                  35.0%               35.0%            35.0%
Effect of foreign
  income tax rates                  (1.5)               (1.0)              .1
State income taxes, net
  of federal tax benefit             3.3                 3.9              3.7
Other, net                            .5                 (.4)             (.8)
Effective tax rate                  37.3%               37.5%            38.0%

Significant  components of the company's  deferred tax assets and liabilities as
of September 30, 1996 and 1995 are as follows:

(Thousands) .......................................          1996          1995

Deferred tax assets attributable to:
 Accrued expenses .................................       $15,802         5,220
 Inventory adjustments ............................         2,045          --
 Total deferred tax assets ........................        17,847         5,220

Deferred tax liabilities attributable to:
       Depreciation and amortization ..............        15,785        13,956
       Inventory adjustments ......................          --             983
       State income taxes .........................            18         1,095
       Other ......................................           479           313

Total deferred tax liabilities ....................        16,582        16,347
Net deferred tax assets (liabilities) .............       $ 1,265       (11,127)

Prepaid  expenses at September  30, 1996 and 1995 include $17.8 million and $4.2
million, respectively, of net deferred tax assets.

Domestic  earnings  before  income taxes were $77.9  million,  $72.0 million and
$62.3  million in 1996,  1995 and 1994,  respectively.  Foreign  operations  had
earnings before income taxes of $22.1 million, $12.2 million and $8.8 million in
1996, 1995 and 1994, respectively.

Undistributed  earnings of the company's foreign  operations  amounting to $99.3
million are intended to remain permanently invested to finance future growth and
expansion.  Accordingly,  no U.S.  income  taxes  have  been  provided  on those
earnings at September 30, 1996. Should such earnings be distributed,  the credit
for foreign income taxes paid would substantially offset applicable U.S.
income taxes.
<PAGE>

(7) Lease Commitments

The major portion of the company's  leases are for Sally Beauty Company  stores.
Other leases cover certain  manufacturing  and  warehousing  properties,  office
facilities,  data processing  equipment and automobiles.  At September 30, 1996,
future minimum payments under noncancelable leases are as follows:

                                                     Operating           Capital
(Thousands)                                           Leases              Leases

1997                                                  $  39,160           1,031
1998                                                     29,498             746
1999                                                     20,846             211
2000                                                     13,093             101
2001                                                      6,435              17
2002 and later                                            7,469              --
Total minimum lease payments                           $116,501           2,106

     Total rental  expense for  operating  leases  amounted to $53.0  million in
1996,  $47.4 million in 1995 and $44.2 million in 1994.  Certain  leases require
the  company  to pay real  estate  taxes,  insurance,  maintenance  and  special
assessments.
<PAGE>
(8) Business Segments and Geographic Area Information

The  "consumer  products"  business  segment  principally  includes  developing,
manufacturing,  distributing and marketing branded consumer  products  worldwide
and includes the company's  Alberto-Culver USA and Alberto-Culver  International
business  units.  This segment also  includes  products  intended for end use by
institutions  and industries and the  manufacturing of custom label products for
other companies.  The "specialty distribution - Sally" business segment consists
of  Sally  Beauty  Company,  a  specialty  distributor  of  professional  beauty
supplies.

Segment and  geographic  data for the years ended  September 30, 1996,  1995 and
1994 are as follows:

<TABLE>
<CAPTION>

Business Segments Information (Thousands)          1996           1995           1994

<S>                                           <C>              <C>            <C>
Net sales:
   Consumer products:
      Alberto-Culver USA ..................   $   377,468        305,681        293,685
      Alberto-Culver International ........       452,030        363,294        300,605
      Total consumer products .............       829,498        668,975        594,290
   Specialty distribution - Sally .........       771,868        697,668        631,529
   Eliminations ...........................       (10,957)        (8,424)        (9,700)
                                              $ 1,590,409      1,358,219      1,216,119
Earnings before provision for income taxes:
   Consumer products:
      Alberto-Culver USA ..................   $    21,445         16,011         11,867
      Alberto-Culver International ........        21,737         16,604         12,241
      Total consumer products .............        43,182         32,615         24,108
   Specialty distribution - Sally .........        78,871         71,889         63,907
     Operating profit .....................       122,053        104,504         88,015
   Unallocated expenses, net* .............        (9,971)       (13,730)       (11,086)
   Interest expense, net of interest income       (12,068)        (6,532)        (5,851)
                                              $   100,014         84,242         71,078
Identifiable assets:
   Consumer products:
      Alberto-Culver USA ..................   $   197,478        130,592        128,189
      Alberto-Culver International ........       333,738        284,750        208,545
      Total consumer products .............       531,216        415,342        336,734
   Specialty distribution - Sally .........       308,869        257,437        229,543
   Corporate** ............................        69,181        142,307         43,931
                                              $   909,266        815,086        610,208
Depreciation and amortization expense:
   Consumer products:
      Alberto-Culver USA ..................   $     7,601          4,616          4,041
      Alberto-Culver International ........        11,376          8,433          6,217
      Total consumer products .............        18,977         13,049         10,258
   Specialty distribution - Sally .........        11,780          9,953          9,077
   Corporate ..............................         2,159          1,677          1,567
                                              $    32,916         24,679         20,902
Capital expenditures:
   Consumer products:
      Alberto-Culver USA ..................   $    11,419         11,975          6,107
      Alberto-Culver International ........         8,885          6,293          4,978
      Total consumer products .............        20,304         18,268         11,085
   Specialty distribution - Sally .........        20,872         13,746         15,482
   Corporate ..............................          --              381            460
                                              $    41,176         32,395         27,027


Geographic Area Information (Thousands)          1996           1995           1994

Net sales:
   United States ..........................   $ 1,148,268        997,065        918,870
   Foreign ................................       453,709        364,543        300,850
   Eliminations ...........................       (11,568)        (3,389)        (3,601)
                                              $ 1,590,409      1,358,219      1,216,119
Operating profit:
   United States ..........................   $    97,628         88,025         77,248
   Foreign ................................        24,425         16,479         10,767
                                              $   122,053        104,504         88,015
Identifiable assets:
   United States ..........................   $   507,545        390,763        362,781
   Foreign ................................       332,540        282,016        203,496
   Corporate** ............................        69,181        142,307         43,931
                                              $   909,266        815,086        610,208

*    "Unallocated  expenses,  net"  principally  consists  of general  corporate
     expenses and foreign exchange gains and losses.
**  Corporate   identifiable   assets  are  primarily  cash,  cash  equivalents,
short-term investments and equipment.
</TABLE>

(9) Quarterly Financial Data

Unaudited quarterly consolidated statement of earnings information for the years
ended September 30, 1996 and 1995 are summarized below (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
                                                               1st         2nd        3rd        4th
                                                             Quarter    Quarter    Quarter    Quarter
<S>                                                           <C>         <C>        <C>        <C>
1996:
Net sales .................................................   $347,638    396,146    415,554    431,071
Cost of products sold .....................................    178,343    200,459    208,526    217,752
Net earnings ..............................................     12,875     14,469     16,452     18,948
Earnings per share:
     Primary ..............................................        .46        .51        .58       . 67
     Fully-diluted ........................................        .44        .49        .55       . 63


1995:
Net sales .................................................   $311,474    324,208    357,678    364,859
Cost of products sold .....................................    155,548    161,597    180,590    184,854
Net earnings ..............................................     11,195     12,230     13,634     15,592
Earnings per share:
        Primary ...........................................        .40        .44        .49        .56
        Fully-diluted .....................................        .40        .44        .49        .54

</TABLE>


(10) Acquisitions and Divestiture

In April, 1995, the company's Sweden-based  subsidiary,  Cederroth International
AB,  completed the  acquisition of the Toiletries  Division of Molnlycke AB. The
acquired  division  develops,  manufactures and markets body and skin care, hair
care, oral care and household products in Scandinavia.  The acquisition,  valued
at  approximately  $50 million,  was  accounted for as a purchase and was funded
with local bank borrowings payable in Swedish krona.

The  operations of the Molnlycke  Toiletries  business have been included in the
company's  consolidated  financial  statements since April,  1995. Had Molnlycke
Toiletries  been  acquired at the  beginning of fiscal year 1994,  the pro-forma
inclusion of its operating  results  would not have had a significant  effect on
the reported  consolidated  net earnings for the two year period ended September
30, 1995.

     In February,  1996, the company acquired St. Ives Laboratories,  Inc. ("St.
Ives") for  approximately  $110 million.  St. Ives  develops,  manufactures  and
markets  personal care products  under its Swiss Formula brand and  manufactures
custom label products for other  companies.

The purchase of St. Ives was funded with the net proceeds available from the
July, 1995 issuance

<PAGE>

of $100 million of 5.5% convertible subordinated debentures and from the sale of
certain trade accounts receivable in January, 1996.

The  acquisition  has been  accounted  for as a purchase and,  accordingly,  the
operating  results of St. Ives have been included in the company's  consolidated
financial statements since the date of acquisition.  The excess of the aggregate
purchase   price  over  the  fair  market  value  of  net  assets   acquired  of
approximately $47 million is being amortized over 40 years.

The following  unaudited pro forma  consolidated  results of operations  for the
years ended September 30, 1996 and 1995 assume the St. Ives acquisition occurred
as of October 1, 1994 (in thousands, except per share data):


                                                  1996                    1995

Net sales                                   $1,647,063                1,518,487
Net earning                                     63,056                   48,875
Earnings per share:
      Primary                                    2.23                     1.76
      Fully-diluted                              2.12                     1.74

In July,  1996,  Alberto-Culver  USA sold its  Milani,  DiaFoods,  Thick-It  and
Smithers   institutional   food  lines  and  granted  the   purchaser  a  master
distribution  license to sell the company's other  institutional  food products.
The transaction resulted in an immaterial gain and is included in administrative
expense.


Independent Auditors' Report

The Board of Directors and Stockholders
Alberto-Culver Company:

We have audited the accompanying  consolidated  balance sheets of Alberto-Culver
Company and  subsidiaries  as of  September  30, 1996 and 1995,  and the related
consolidated  statements of earnings,  retained earnings and cash flows for each
of  the  years  in  the  three-year  period  ended  September  30,  1996.  These
consolidated  financial  statements  are  the  responsibility  of the  company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of  Alberto-Culver
Company and  subsidiaries  as of September 30, 1996 and 1995, and the results of
their  operations  and their cash flows for each of the years in the  three-year
period  ended  September  30,  1996,  in  conformity  with  generally   accepted
accounting principles.

Chicago, Illinois
October 23, 1996                              KPMG Peat Marwick LLP


<PAGE>



Management's Discussion and Analysis of Results of Operations and Financial
Condition Alberto-Culver Company and Subsidiaries

RESULTS OF OPERATIONS

Fiscal  year 1996 marked the  company's  thirteenth  consecutive  year of record
sales.  Net sales for the year ended  September 30, 1996 were $1.59 billion,  an
increase of 17.1% over prior year sales of $1.36 billion. Net sales in 1994 were
$1.22 billion.

Record  net  earnings  of $62.7  million in 1996  increased  19.2% from 1995 net
earnings of $52.7 million.  Primary earnings per share of $2.22 were 33 cents or
17.5% higher than 1995. Fully-diluted earnings per share were $2.11, an increase
of 24 cents or 12.8% from 1995. Net earnings in 1994 were $44.1 million or $1.57
per share on a primary and fully-diluted basis.

Prior to 1996, the Consumer  Products  Division of  Alberto-Culver  USA recorded
certain  promotional  allowances  that were shown as a  deduction  from the list
price reported on customer invoices as promotion expenses.  Effective October 1,
1995, the division  changed its method of reporting to a net sales basis thereby
reducing sales and promotion  expense by $12.6 million for 1996. This change had
no effect on net  income and prior  periods  have not been  reclassified  due to
immateriality.  The change is in  conformity  with  industry  practice  and also
provides  management with financial  information that is consistent across other
divisions of Alberto-Culver USA and Alberto-Culver International.

Sales of Alberto-Culver  USA consumer  products in 1996 were $377.5 million,  an
increase  of 23.5% from prior year sales of $305.7  million.  The 1996  increase
primarily  resulted from the  acquisition of St. Ives  Laboratories,  Inc. ("St.
Ives") in February,  1996, which added $87.7 million of sales,  partially offset
by lower sales due to the change in the  classification  of certain  off-invoice
promotional  allowances discussed above. In 1995, sales increased 4.1% from 1994
sales of  $293.7  million  primarily  due to  higher  sales of  Alberto  VO5 and
TRESemme shampoo and conditioner products, FDS feminine deodorant spray and Mrs.
Dash  seasoning  products,  partially  offset by lower  sales  for the  Alberto,
Alberto VO5 and Bold Hold hair styling lines and the  discontinuation of Village
Saucerie sauce and recipe mixes.

Alberto-Culver International consumer products sales were $452.0 million in 1996
compared  to  $363.3  million  in 1995 and  $300.6  million  in 1994.  The sales
increases in 1996 and 1995 primarily resulted from acquisitions.  The Toiletries
Division of Sweden-based  Molnlycke AB was purchased in April, 1995 and St. Ives
was acquired in February, 1996.

Sales of the "Specialty  distribution  - Sally"  business  segment  increased to
$771.9 million in 1996 compared to $697.7 million and $631.5 million in 1995 and
1994,  respectively.  The higher sales in 1996 were  attributable to sales gains
for  established  Sally  Beauty  Company  outlets and the addition of 162 stores
during the year. The number of Sally stores  increased 34.1% over the last three
years to a total of 1,656 at the end of 1996  compared to 1,494 and 1,363 at the
end of 1995 and 1994, respectively.

Cost of  products  sold as a  percentage  of sales was 50.6% in fiscal year 1996
compared  to 50.3%  in 1995 and  49.6%  in  1994.  The  increase  in the cost of
products  sold  percentage  over the last three years  primarily  resulted  from
changes in product mix,  higher raw material  costs and the 1996 addition of St.
Ives' custom label business which has a higher cost of goods sold percentage. In
1996, the cost of products sold  percentage was also higher due to the reduction
in sales resulting from the change in recording certain off-invoice  promotional
allowances.

Advertising,  promotion,  selling and administrative expenses increased 15.1% in
1996 and 9.0% in 1995. The increase in 1996 resulted from the acquisition of St.
Ives in February,  1996, the inclusion of the operations of Molnlycke Toiletries
for a full year,  higher selling and  administrative  costs  associated with the
increase in the number of Sally  Beauty  Company  stores and the discount on the
sale of certain trade  receivables.  These increases were partially offset by an
immaterial,  non-recurring  gain  on the  sale  of  certain  Alberto-Culver  USA
institutional  food lines in July, 1996. The higher costs in 1995 were primarily
due to selling and  administrative  costs  associated  with the  increase in the
number of Sally stores and higher  advertising and promotional  expenditures for
consumer products.

<PAGE>

Advertising,  promotion and market  research  expenditures  were $208.4 million,
$188.0  million and $178.5  million in 1996,  1995 and 1994,  respectively.  The
increase in 1996 mainly  resulted from the  acquisition of St. Ives in February,
1996 and the  inclusion of the  operations  of Molnlycke  Toiletries  for a full
year,   partially  offset  by  the   reclassification   of  certain  off-invoice
promotional allowances.

Interest expense,  net of interest income,  was $12.1 million,  $6.5 million and
$5.9 million in 1996, 1995 and 1994,  respectively.  Interest  expense was $15.9
million  in 1996  versus  $9.9  million in 1995 and $8.6  million  in 1994.  The
increase  in  interest  expense  in 1996  was  attributable  to the  convertible
subordinated  debentures  and  borrowings  related to the Molnlycke  acquisition
being  outstanding  for the full year along  with the  penalty  incurred  on the
August,  1996 prepayment of the $20 million,  9.73% term notes.  These increases
were mitigated by the  elimination  of interest  expense on the $30.0 million of
term loans retired in July, 1995.

Interest  income was $3.8 million,  $3.4 million and $2.8 million in 1996,  1995
and 1994, respectively. The increases in 1996 and 1995 principally resulted from
investing  the  July,  1995  net  proceeds  of  the  $100  million   convertible
subordinated  debentures  until the funds were used for the  acquisition  of St.
Ives in February, 1996.

The provision  for income taxes as a percentage of earnings  before income taxes
was 37.3%, 37.5% and 38.0% in 1996, 1995 and 1994,  respectively.  Factors which
influenced  the effective tax rates for those years are described in "note 6" to
the consolidated financial statements.

FINANCIAL CONDITION

Working  capital at September 30, 1996 was $226.1  million,  a decrease of $75.6
million from the prior year's working capital of $301.7  million.  The resulting
current  ratio was 1.79 to 1.00 at September  30, 1996  compared to 2.28 to 1.00
last year.  The decrease was  primarily  due to the  acquisition  of St. Ives in
February,  1996, the  prepayment of the $20 million term notes in August,  1996,
capital  expenditures  and  dividend  payments,  partially  offset  by  the  net
after-tax  proceeds from the sale of certain  Alberto-Culver  USA  institutional
food lines in July, 1996 and cash provided by operating activities.

Accounts receivable and inventories less accounts payable were $259.6 million at
September  30, 1996  compared to $232.8  million  last year.  The  increase  was
primarily due to inventories  needed to support the 10.8% increase in the number
of Sally  stores in 1996 and the  acquisition  of St.  Ives in  February,  1996,
partially offset by the sale of $30 million of certain trade accounts receivable
in January, 1996.

Prepaid expenses in 1996 increased $14.4 million to $26.9 million  primarily due
to current deferred tax assets.  Components of deferred tax assets are described
in "note 6" to the consolidated financial statements.

Net property,  plant and equipment  increased $18.1 million to $175.9 million at
September 30, 1996. The increase resulted  primarily from the acquisition of St.
Ives,  additional  Sally  stores,  a  new  Sally  warehouse  and  other  capital
expenditures for machinery, equipment and information systems.

Goodwill and trade names, net of amortization, increased $130.2 million over the
last two  years to a total of $184.5  million  as of  September  30,  1996.  The
primary  reasons for the increase were the  acquisitions of St. Ives in 1996 and
the Toiletries Division of Molnlycke AB in 1995.

Long-term  debt  decreased  $21.5 million  principally  due to the August,  1996
prepayment of the $20 million,  9.73% term notes which were  scheduled to mature
in November, 1998.

Total  stockholders'  equity  increased  $54.2  million  to  $425.1  million  at
September 30, 1996,  primarily due to net earnings for the fiscal year partially
offset by dividend payments.

LIQUIDITY AND CAPITAL RESOURCES

The company's  primary sources of cash over the past three years have been funds
provided by

<PAGE>
operating  activities and the July,  1995 issuance of  convertible  subordinated
debentures.  Operating activities provided cash of $92.7 million,  $81.8 million
and $65.4 million in 1996, 1995 and 1994, respectively.

The company has obtained long-term  financing as needed to fund acquisitions and
other growth opportunities.  As evidenced by the issuance of the $100 million of
convertible  subordinated  debentures  in July,  1995,  funds  are  occasionally
obtained prior to their actual need in order to take advantage of  opportunities
in the debt markets. The company also obtained funds in 1996 through the sale of
$30 million of trade accounts receivable.

Under  existing  debt  covenants,  the company has the ability to enter into new
financing  arrangements  aggregating up to $685 million.  At September 30, 1996,
the company had available lines of credit of $109 million with various financial
institutions.  The credit lines, which require no compensating  balances, may be
terminated at the option of the respective banks or the company.

The  primary  uses  of  cash  have  been  to  repay   long-term  debt  and  fund
acquisitions.  Over the three  year  period  ending  September  30,  1996,  debt
repayments  exceeded  proceeds from new  borrowings,  excluding the  convertible
subordinated  debentures,  by $44.4 million. Other major uses of cash during the
three year period  included  payments for acquired  companies of $180.2 million,
capital  expenditures  of $98.1  million,  cash  dividends of $26.0  million and
common stock purchases for the treasury of $14.5 million.

Compared to 1993,  cash dividends per share  increased 27.3% over the three-year
period ended  September  30, 1996.  Cash  dividends  paid on Class A and Class B
common  stock  were 35 cents per  share in 1996,  31 cents per share in 1995 and
27.5 cents per share in 1994.

The company  anticipates  that cash flows from  operations and available  credit
will be  sufficient to fund  operational  requirements  in future years.  During
1997, the company  expects that cash will continue to be used for  acquisitions,
capital expenditures, new product development,  market expansion,  retirement of
debt and dividend  payments.  The company may also purchase shares of its common
stock depending on market conditions.

IMPACT OF NEW ACCOUNTING STANDARDS

Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of", requires that long-lived assets and certain identifiable  intangibles of an
entity be reviewed for impairment  whenever  events or changes in  circumstances
indicate  that the  carrying  amount  of an asset  may not be  recoverable.  The
company  is  required  to  comply  with  SFAS No.  121 in  fiscal  year 1997 and
estimates that its adoption will not have a material effect on the  consolidated
financial statements.

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 pro forma  disclosures  as if the fair value method was adopted.  The company
will  implement  SFAS No. 123 in fiscal year 1997 by providing  the required pro
forma disclosures.

SFAS No. 125,  "Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishments  of  Liabilities",  requires  an  entity,  after a  transfer  of
financial assets, to recognize the assets it controls and the liabilities it has
incurred,  and to write-off  assets when control has been surrendered and remove
liabilities when obligations have been extinguished.  The company is required to
comply with SFAS No. 125 in fiscal  year 1997 and  estimates  that its  adoption
will not have a material effect on the consolidated financial statements.

INFLATION

The company was not  significantly  affected by inflation  during the past three
years.  Management continuously attempts to resist cost increases and counteract
the effects of  inflation  through  productivity  improvements,  cost  reduction
programs and price increases  within the  constraints of the highly  competitive
markets in which the company operates.


<PAGE>
<TABLE>
<CAPTION>

Selected Financial Data
Alberto-Culver Company and Subsidiaries
                                                                        Year ended September 30,
(In thousands, except per share data) ............................         1996         1995         1994         1993        1992
<S>                                                                  <C>           <C>          <C>          <C>          <C>
Operating Results:
Net sales ........................................................   $1,590,409    1,358,219    1,216,119    1,147,990    1,091,286
Cost of products sold ............................................      805,080      682,589      602,749      564,260      534,979
Interest expense .................................................       15,905        9,946        8,630        9,661       11,665
Earnings before income taxes .....................................      100,014       84,242       71,078       65,129       61,356
Provision for income taxes .......................................       37,270       31,591       27,010       23,857       22,740
Net earnings .....................................................       62,744       52,651       44,068       41,272       38,616
Net earnings per share:
     Primary .....................................................         2.22         1.89         1.57         1.44         1.36
     Fully-diluted ...............................................         2.11         1.87         1.57         1.44         1.36
Weighted average shares outstanding:
     Primary .....................................................       28,213       27,849       28,042       28,717       28,363
     Fully-diluted ...............................................       31,388       28,576       28,081       28,717       28,363
Financial Condition:
Cash, cash equivalents and
 short-term investments ..........................................   $   71,557      146,985       50,362       73,947       80,158
Working capital ..................................................      226,123      301,706      185,747      205,050      193,080
Current ratio ....................................................    1.79 to 1    2.28 to 1    1.86 to 1    2.05 to 1    1.88 to 1
Property, plant and equipment, net ...............................      175,920      157,791      132,881      124,449      121,703
Total assets .....................................................      909,266      815,086      610,208      593,046      610,400
Long-term debt ...................................................       61,548       83,094       42,976       80,184       84,549
Convertible subordinated debentures ..............................      100,000      100,000         --           --           --
Stockholders' equity .............................................      425,096      370,903      326,970      298,857      286,222
Cash dividends per share* ........................................          .35          .31         .275         .275         .235

*    Dividends  per share on Class A common  stock and Class B common stock have
     been equal since the Class A shares were  issued in  April,1986.  Dividends
     paid in fiscal 1993 include a one-time  extraordinary dividend of two cents
     per share in recognition of the company  surpassing one billion  dollars in
     sales for the fiscal year ended September 30, 1992.
</TABLE>



Annual 10-K Report
Stockholders may obtain a copy of the company's 1996 Form 10-K Report filed with
the  Securities  and  Exchange  Commission  without  charge  by  writing  to the
Corporate Secretary, Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park,
Illinois 60160.


<PAGE>

<TABLE>
<CAPTION>
Market Price of Common Stock and Cash Dividends Per Share
Alberto-Culver Company and Subsidiaries

The high and low sales prices of both classes of the  company's  common stock on
the New York Stock  Exchange  and cash  dividends  per share in each  quarter of
fiscal years 1996 and 1995 are as follows:

                               Market Price Range                 Cash Dividends
                                  1996                1995           Per Share
                              High       Low     High      Low      1996    1995
<S>                           <C>       <C>      <C>      <C>      <C>       <C> 
Class A (NYSE Symbol ACVA):
   First Quarter ..........   $32-3/8   25-3/4   24-7/8   20-7/8   $   .08   .07
   Second Quarter .........   38-7/8    29-5/8   26-5/8       23       .09   .08
   Third Quarter ..........   40-1/8    32-7/8       28   24-7/8       .09   .08
   Fourth Quarter .........   40-1/4    33-7/8   27-1/4   24-3/4       .09   .08
                                                                     ----   ----
                                                                   $   .35   .31


Class B (NYSE Symbol ACV):
   First Quarter ..........   $36-1/2   29-7/8   27-3/8   21-3/4   $   .08   .07
   Second Quarter .........   43-3/4    32-1/2   30-7/8   25-7/8       .09   .08
   Third Quarter ..........   46-3/4    36-3/4   32-1/2   29-5/8       .09   .08
   Fourth Quarter .........   47-1/2        40   31-1/2   27-7/8       .09   .08
                                                                      ----  ----
                                                                   $   .35   .31


As of November 21, 1996, stockholders of record totaled 1,107 for Class A shares
and 1,221 for Class B shares.
</TABLE>