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Estee Lauder raises 2016 sales forecast as makeup sales shine

Lipstick is displayed in the M.A.C flagship store in Paris, February 28, 2013. REUTERS/Philippe Wojazer

(Reuters) - Estee Lauder Cos Inc <EL.N> reported better-than-expected quarterly sales and profit and raised the low end of its 2016 sales forecast, helped by strong demand for makeup brands such as Smashbox and Tom Ford.

The company forecast sales to grow 9-10 percent on a constant currency basis for the year ending June 30. It had earlier expected sales to grow 8-10 percent.

Estee Lauder has been focusing on catering to younger customers by offering brands such as Jo Malone and Bobbi Brown, as "heritage" brands Estee Lauder and Clinique lose some shine in North America, its biggest market.

The company has also increased its efforts on marketing make-up, especially through social media.

Sales in the makeup division, the company's biggest business by revenue, rose 6.4 percent to $1.25 billion in the second quarter, from a year earlier, boosted by demand for lipsticks and foundations.

Online business sales grew in "strong double-digits" percentage rate in the quarter ended Dec. 31 in North America.

Net income attributable to the company rose 2.4 percent to $446.2 million, or $1.19 per share.

Revenue rose 2.6 percent to $3.12 billion, surpassing the average analyst estimate of $3.08 billion, according to Thomson Reuters I/B/E/S.

Excluding items, Estee Lauder earned $1.22 per share, above estimates of $1.11.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Maju Samuel)