UPDATE 2-Estee Lauder scales back sales forecast on Europe worry

* Profit excluding items 79 cents share vs 77 cents estimate

* Sees yearly sales up 6-7 percent vs previous 6-8 percent

* Raises dividend, plans more share repurchases

* Shares down 1 percent in morning trading

Nov 1 (Reuters) - Estée Lauder Cos Inc scaled back the top end of its full-year forecast for sales Thursday amid uncertainty in some key markets, and said it expects poor demand in Europe to persist.

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

While sales growth was strong in the United States and China, Europe was a drag in the last quarter, with France, Spain, Russia and Switzerland showing declines.

``In Europe, there is a low-consumption crisis,'' Chief Executive Fabrizio Freda told Reuters, speaking of Europe's Mediterranean rim. ``That is there to stay for a while.''

Shares of New York-based Estee Lauder fell 1 percent to $60.98 in morning trading.

The cosmetics maker said its board of directors 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 grew 2.9 percent to $2.55 billion, slower than in the previous quarter, weighed down in part by a less favorable exchange rate.

``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.

Freda said Estee Lauder had weathered a slowdown in China that has hurt other luxury companies by also being present in the Asian giant's second-tier but growing cities.

Estee Lauder reported a higher than expected quarterly profit of $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 earned a profit of 79 cents a share, beating analysts' estimates of 77 cents, according to Thomson Reuters I/B/E/S.

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