By Ramkumar Iyer
(Reuters) - Luxury jeweler Tiffany & Co (N:TIF) reported better-than-expected quarterly sales and profit as it benefited from higher spending by tourists in Europe and growing demand for its Tiffany T line of fashion jewelry.
Shares of the company, which reiterated its full-year earnings forecast, rose as much as 12.6 percent to $96.28 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 as well as strong local demand.
The weaker euro and the pound have made it attractive for foreign tourists to shop in Europe, Mark Aaron, vice president of investor relations said on a conference call.
Between a quarter and a third of Tiffany's sales in Europe are made to foreign tourists, Aaron told Reuters.
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. First-quarter sales were lowered by 6 percent due to currency fluctuations, the company said.
"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 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. Analysts on average had expected declines of 11.6 percent in Europe and 4.9 percent in the Americas, according to 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 above the 70 cents analysts expected, according to Thomson Reuters I/B/E/S.
Revenue fell 5 percent to $962.4 million, but beat the average analyst estimate of $918.7 million.
The company's shares were up 11.9 percent at $95.78 in afternoon trading.