Estee Lauder Cos (EL) said there have been early signs of an economic improvement in the U.S. but that retail sales remain soft, particularly at high-end department and specialty stores.

On a conference call, the maker of high-end beauty products said it's staying cautious in its outlook for consumer spending and is assuming that a "challenging" economic environment will last for at least the next twelve months.

For its fiscal fourth quarter ending in June, the company's guidance indicates earnings of 11 cents to 23 cents a share, excluding special items.

The company said its still seeing retailer inventory cuts. Earlier in the day Estee Lauder reported that its fiscal third-quarter earnings fell 70% on lower sales, especially at department stores. Results exceeded analyst expectations and the stock was recently up 9% to 33.93.

-By Anjali Cordeiro; Dow Jones Newswires; 201-938-2408; anjali.cordeiro@dowjones.com