Tiffany's sales, profit beat on higher tourist spending in Europe

Shares of the company, which reiterated its full-year earnings forecast, rose as much as 12.3 percent to $96.04 in early trading on Wednesday. The stock was among the biggest percentage gainers on the New York Stock Exchange.

Sales in Europe rose 2 percent in the first quarter ended April 30, Tiffany said, attributing the increase to more tourists shopping at its stores and strong local demand.

The weaker euro and the pound have made it attractive at the moment for foreign tourists to shop in Europe, a company executive said on a post-earnings conference call.

Tiffany has been struggling with a strong dollar, which discourages tourists from spending in its U.S. stores and reduces the value of overseas sales.

"Some of these are big-ticket items, so when you're spending $5,000-$10,000 on an item, (a weaker currency) can make a difference," Edward Jones analyst Brian Yarbrough said, adding that this is helping Tiffany alleviate forex fluctuations.

The company's results were also boosted by higher demand for its new Tiffany T line of fashion jewelry.

Tiffany T, Francesca Amfitheatrof's first collection after taking over as design director last year, features bracelets, necklaces and rings with a 'T' motif priced between $350 and $20,000.

Sales in the Americas region rose 1 percent to $444 million due to higher sales to U.S. customers and growth in Canada and Latin America.

Tiffany said same-store sales fell 2 percent in Europe and 1 percent in the Americas region. Analysts on average had expected declines of 11.6 percent in Europe and 4.9 percent in the Americas, according to research firm Consensus Metrix.

Overall comparable sales fell 7 percent, compared with the 9 percent decline analysts had expected.

The company's net income fell 16.5 percent to $104.9 million, or 81 cents per share, but came in much higher than the 70 cents analysts on average had expected, according to Thomson Reuters I/B/E/S.

Gross margins rose to 59.1 percent from 58.2 percent.

Revenue fell 5 percent to $962.4 million, but was above the average analyst estimate of $918.7 million.

The company's shares were up 11.7 percent at $95.48 in late morning trading.

(Reporting by Yashaswini Swamynathan and Ramkumar Iyer in Bengaluru; Editing by Ted Kerr)

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