Estee Lauder Cos. (EL) expects its fiscal first-quarter earnings to be "significantly" higher than its already-rosy view because of better-than-expected sales and caution on spending.

Shares were up 6.47% premarket at $41.65 on the news. Through Thursday, the stock was up 26% this year.

The beauty-products industry has suffered as consumers continue to curb spending, and Estee Lauder has had to lessen its dependence on faltering U.S. department stores. In the fiscal fourth quarter, it reported particular weakness in its upscale make-up and fragrance businesses.

But its efforts to control costs, including an announcement early this year it would slash 6% of its work force, appear to be paying off as consumers warm up to discretionary buying again.

In August, Estee Lauder had called for quarterly earnings between 23 and 30 cents a share, above analysts' estimates at the time, although its fiscal-year view remained cautious. However, Estee Lauder said Friday it expected to raise the year's view when it reports its quarterly results Oct. 30. It also noted it plans to accelerate investment spending after reining that in because of uncertainty about the economy linked to the recession and swine flu.

Regarding the first-quarter outperformance, the company cited strong sales from new product launches, especially in Asia, as wells as higher traffic in the travel-retail business and more beneficial foreign exchange. It said holiday shipments were coming earlier than they expected, which could pull down earnings this quarter, when the shipments were mostly expected.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com