Cosmetic & Fragrance Concepts Inc., a Beltsville-based owner of a chain of cosmetics stores, said its profit and sales rose sharply in its first fiscal quarter, which ended Dec. 25.

The company, which operates the 18-store Cosmetic Center chain in the Washington, Baltimore, Richmond and Chicago areas, said it earned $544,000 (18 cents per share) in the quarter, up 63 percent from $333,000 (11 cents) a year ago.

Revenue rose 27 percent, to $18.1 million from $14.3 million in the year-ago quarter.

USF&G Corp., a Baltimore-based insurance company, said its profit slipped 6 percent in 1987, mostly due to $107.4 million in investment losses.

The company said the losses stemmed from USF&G's policy of using call options to hedge against stock market declines -- a strategy that cost money during the first nine months of the year, but which protected USF&G's investments when the market collapsed in October.

Most of the investment losses occurred in the first quarter of 1987, when the market was soaring, the company said.

USF&G said it earned $279.2 million ($3.63) in 1987, compared with $296.3 million ($4.43) in 1986.

Revenue during the year rose 11 percent, to $4.8 billion from $4.3 billion.

For the fourth quarter, USF&G said it earned $84.8 million ($1.06), compared with a $23.8 million loss in the fourth quarter of 1986.

Revenue in the quarter rose 15 percent, to $1.4 billion from $1.2 billion.