UPDATE 3-Tiffany profit beats Street view; outlook strong

(Updates share price, adds analyst comments)

By Aarthi Sivaraman

NEW YORK, March 24 (Reuters) - Tiffany & Co (TIF.N: Quote, Profile, Research) posted higher-than-expected quarterly profit on Monday as increased sales overseas and new stores helped offset the effect of a weaker U.S. economy that has strained consumer spending.

The shares of the jewelry company jumped more than 13 percent after it also gave a strong earnings outlook for the current fiscal year and forecast robust sales growth in overseas markets other than Japan.

Still, Tiffany maintained a cautious stand on U.S. sales, as it continued to expect earnings to be pressured in the first and second quarters.

The company, like mid-tier rivals Zale Corp (ZLC.N: Quote, Profile, Research) and Finlay Enterprises Inc FNLY.O, saw sales at established U.S. stores drop in the key November-December holiday period as shoppers, faced with a weak economy, cut back on purchases of jewelry and other discretionary items.

But domestic sales benefited from scores of tourists, especially from Europe, who took advantage of the weak dollar and shopped actively in Tiffany's flagship location in New York and at stores in cities such as San Francisco and Las Vegas.

International sales rose 21 percent during the fourth quarter ended on Jan. 31.

The company, which will unveil the first of its smaller format stores in the Los Angeles market this year, opened 17 new stores worldwide during the past fiscal year.