What happened

Shares of Estee Lauder (EL -0.17%) were rising last month after the cosmetics giant turned in a strong second-quarter earnings report. Like other beauty companies, Estee Lauder appears to be benefiting from surging sales in the prestige-beauty segment. According to data from S&P Global Market Intelligence, the stock finished February up 15%.

As the chart below shows, the bulk of the stock's gains in the month came at the beginning of February after the company reported earnings.

EL Chart

EL data by YCharts.

So what 

Estee Lauder's stock rose 12% on Feb. 5 as the company announced second-quarter results, beating estimates on the top and bottom lines. A strong performance in China buoyed overall growth as constant-currency sales rose 20% in the Asia/Pacific region, and prestige beauty accelerated in China as the company gained share in that valuable market. 

Two women sampling beauty products.

Image source: Getty Images.

Total revenue rose 7%, or 11% after adjusting for currency exchange and the new revenue recognition standard, to $4 billion, ahead of estimates of $3.92 billion. The company noted the strong growth of brands like Estee Lauder, La Mer, and MAC, and reported sales in the skin care category was up 18%. 

With the help of a lower tax rate, adjusted earnings per share rose from $1.52 to $1.86, easily beating expectations of $1.54. CEO Fabrizio Freda said: "We delivered an excellent performance in our fiscal second quarter. Importantly, this was our eighth consecutive quarter of impressive net sales growth that met or exceeded our long-term goal, all while navigating many global macro issues." 

Check out the latest earnings call transcript for Estee Lauder.

Now what

Estee Lauder also lifted its full-year guidance for the year, calling for sales to increase 5% to 6%, up from a prior forecast of 4% to 5%. Excluding currency exchange and the new revenue recognition standard, the company sees revenue rising 8% to 9% for the year.  

On the bottom line, it now expects adjusted earnings per share of between $4.92 and $5, up from a previous range of $4.73 to $4.82 and higher than the $4.51 it reported last year. With tailwinds in China, skin care, and overall prestige beauty, Estee Lauder looks poised to deliver more solid growth.