Estee Lauder Cos Inc raised its profit outlook for the year after strong demand for its makeup and skin-care products around the world helped it crush profit and sales estimates in the first quarter.

Photo: Corbis

The maker of Bobbi Brown, MAC and other cosmetics also said on Thursday that it would raise its annual dividend 40 percent, and announced a 2-for-1 stock split. Its shares rose almost 18 percent to $118.86.

Estee Lauder said demand was particularly robust in Asian areas such as China, Hong Kong, South Korea, Taiwan and Thailand.

Business was good in Europe too, despite a tough climate for consumer spending, thanks to Estee Lauder winning market share from rivals and attracting new customers with lower-priced items like its Clinique line, its CEO said.

"This isn't optimism about Europe -- it's optimism about our business in Europe," Chief Executive Fabrizio Freda told Reuters.

Last month, L'Oreal SA also said sales were holding up despite Europe's crisis.

Estee Lauder benefited from luxury's overall resilience despite turbulent global markets.

"I strongly believe the long-term fundamentals of the luxury market are very strong," Freda said.

Estee Lauder has continued to gain share of the global prestige, high-end beauty market, with its "best-in-class brand portfolio and developing market growth," said Stifel Nicolaus analyst Mark Astrachan.

Rival Elizabeth Arden Inc also reported a higher-than-expected quarterly profit on Thursday, boosted by strength in emerging markets such as Asia.

RAISING EXPECTATIONS

Net profit rose to $278.6 million, or $1.40 a share, in the first quarter ended Sept. 30, up from $191.1 million, or 95 cents a share, a year earlier.

Excluding items, it earned $1.41 a share, well ahead of analysts' average estimate of $1.18, according to Thomson Reuters I/B/E/S.

Net sales rose 18 percent to $2.48 billion, while analysts had expected $2.41 billion. Excluding foreign currency, net sales rose 14 percent.

For the year, Estee Lauder sees net sales rising 8 percent to 10 percent in constant currency, which is two percentage points higher than its prior outlook.

Estee Lauder expects fiscal year 2012 earnings of $4.25 a share to $4.45 a share, up from its prior forecast of $4.00 to $4.20, before items.

Estee Lauder increased the annual dividend on the company's Class A and Class B common stock to $1.05 a share.

The company said it would implement the stock split in the form of a stock dividend, with the additional shares to be issued on Jan. 20 to stockholders of record on Jan. 4. As of Oct. 25, Estee had about 192.6 million outstanding common shares.

Elizabeth Arden, which sells Prevage anti-aging creams and celebrity fragrances by stars including Britney Spears, just maintained its profit and sales forecast for the year. Its shares rose 0.3 percent to $34.34.