It was a Pyrrhic victory for Estee Lauder (NYSE:EL) yesterday as the company reported decent year-over-year earnings and sales growth for its fourth quarter. Shares retreated 6.7% because the cosmetics maker missed Wall Street's expectations and provided FY 2008 guidance that was less than acceptable to analysts.

The good news was that the company did report that its EPS from continuing operations increased to $0.45 compared with $0.23 in the year-ago quarter. Net sales also increased 7%, excluding the impact of foreign currency translation. The sales growth in particular was promising, as Estee Lauder experienced net sales growth in each of its product categories as well as in each of its geographic regions. An 18.1% increase in Q4 sales for the fragrance business and a 10.1% increase in sales from the  Europe/Africa region were notable.

The problems for Estee Lauder shareholders: The company would have reported EPS from continuing operations that were lower than the prior-year quarter if it weren't for a $0.28 per-share charge Estee Lauder recorded in its 2006 Q4 for non-recurring charges. Management also offered a forecast for its Q1 and FY 2008 that was significantly below what analysts had been expecting.

Overall, it has been tough sledding in 2007 for several beauty/cosmetic stocks. Revlon (NYSE:REV) and Avon Products (NYSE:AVP) are both trading about where they were at the beginning of the year. Even Elizabeth Arden (NASDAQ:RDEN), which was trading up 13.1% at mid-morning, has only now climbed back to its price level from January.

The sales growth from Estee Lauder is intriguing. However, it might take some time for the company to convince investors and Wall Street that this stock is as aesthetically pleasing as its products.

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned. The Fool has a disclosure policy.