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UPDATE 1-Estee Lauder less rosy about yearly sales, shares slip

Thursday, 1 Nov 2012 | 1:27 PM ET

* Profit excluding items 79 cents/share vs Street view 77 cents

* Sees yearly sales up 6-7 percent vs prior view 6-8 percent

* Raises dividend, plans more share repurchases

* Shares down 2.6 percent in premarket trading

Nov 1 (Reuters) - Estée Lauder Cos Inc on Thursday lowered the top end of its full-year sales forecast, pointing to uncertainty in some key markets, and reported quarterly sales growth that was slower than Wall Street expected.

The company, known for its namesake brand as well as lines such as La Mer and MAC, now expects sales this year will rise 6 percent to 7 percent on a constant currency basis, compared with an earlier forecast of a range of 6 percent to 8 percent.

``We are very mindful of the uncertain market dynamics in several countries,'' Chief Executive Fabrizio Freda said in a statement.

Shares of New York-based Estee Lauder fell 2.6 percent to $60 in premarket trading.

The cosmetics maker also said that the board raised the dividend by 37 percent and authorized the repurchase of up to another 40 million shares, or about 10 percent of the total outstanding common stock.

Revenue in the fiscal first quarter rose 2.9 percent to $2.55 billion, dragged down by disappointing sales in Europe that included decreases in key markets like Russia and France.

``Sales growth is most important to the Estee Lauder story and the company's guidance implies it is slowing,'' Stifel Nicolaus analyst Mark Astrachan wrote in a note.

Other luxury companies to signal slowing growth trends include jeweler Tiffany & Co and Burberry Group .

Still, Estee Lauder reported a higher than expected quarterly profit, helped by large gains in the United States and China that helped make up for weakness in Europe.

Profit rose to $299.5 million, or 76 cents a share, in the first quarter ended Sept. 30, up from $278.6 million, or 70 cents a share, a year earlier.

Excluding some restructuring charges, Estee Lauder had a profit of 79 cents, beating analysts' estimates of 77 cents, according to Thomson Reuters I/B/E/S.

The company raised its annual dividend to 72 cents per share from 52.5 cents and said it would move to a quarterly dividend payout schedule starting in 2013.

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