GDANSK, April 28 (Reuters) - Spanish beauty company Puig

reported slower sales growth for the first quarter on

Tuesday, reflecting more moderate demand particularly in

fragrances, which account for the bulk of its revenue, though it

kept its full-year outlook unchanged.

The results highlight growing pressure on the global beauty

sector as geopolitical tensions in the Middle East disrupt

airport shopping and curb international travel, a key sales

channel for premium fragrance makers.

The slowdown also follows a loss of momentum in the broader

fragrance market as consumers turn more cautious, raising

concerns about the sustainability of recent growth trends across

the industry.

Puig reported first-quarter net revenue of 1.22 billion

euros ($1.43 billion), a 4.7% increase on a like-for-like basis

and a 0.8% rise on a reported basis.

J.P. Morgan analysts had expected Puig's first-quarter

like-for-like sales to grow 2.2%, supported by growth across all

divisions even though the global fragrance boom is cooling and

luxury demand remains uncertain.

The company said the Middle East conflict had about a 1.2%

estimated negative impact, mainly in March, with further impacts

expected and the company monitoring the situation.

Travel retail was the most affected part of its Middle East

business and it expects a roughly 1% hit in the first half if

the conflict continues, the company said on a conference call.

The Barcelona-based group, which derives a tenth of sales

from travel retail, is one of the more exposed beauty companies

to swings in airport shopping and international travel,

according to analysts.

"We are taking good care of the situation," Puig executives

said, adding that pressure in the region was heavier in travel

retail than in local business and that Saudi Arabia and Dubai

were showing different levels of performance.

Fragrances and fashion, which account for about 74% of

sales, rose 3.9%, while makeup and skincare categories increased

9.2% and 4.7%, respectively. By region, like-for-like sales in

EMEA, its largest market, grew 3%, compared with 2% in the

Americas and 26.1% in Asia-Pacific.

Puig also said it is closely monitoring cost pressures,

including those related to distribution, but confirmed its

full-year guidance, expecting EBITDA margins to remain flat.

The results come amid talks regarding a potential merger

with U.S. cosmetics giant Estee Lauder ( EL ) which would create

the world's largest premium beauty player with brands including

Tom Ford, Carolina Herrera, Rabanne, Jean Paul Gaultier, and

Clinique under one roof.

No final decision has been taken as of April 28, and no

assurance on the deal or its terms has been made, Puig added.

($1 = 0.8538 euros)