Tiffany raises outlook after amazing quarter

The economy has turned around for the world's wealthy, and the wealthy have turned to Tiffany (TIF).

Shares of the jeweler are up more than 8% today to $75.79. Earlier this morning, the stock hit a record high of $76.22 after the company posted a blowout first quarter and raised its outlook for the year.

Luxury retail stocks went along for the ride as well. Shares of Saks (SKS) and Macy's (M) rose more than 1%, Coach (COH) jumped more than 4% and Nordstrom (JWN) climbed nearly 1%. "There is a targeted willingness to splurge again," an Edward Jones analyst told Reuters.

Post continues after this analyst interview about Tiffany's earnings:
Tiffany's worldwide sales rose 20%, and all regions saw an increase -- even after the jeweler hiked prices to cover rising costs for precious metals and diamonds. One of the biggest sales spikes was in the Asia-Pacific region, which saw a 37% increase. Even Tiffany's famous store on New York's Fifth Avenue reported a 23% sales jump.

"Customers are certainly aware of rising commodity costs and we have not experienced any meaningful resistance to higher prices," said Mark Aaron, a Tiffany investor relations executive.

Investors had been anxiously awaiting Tiffany's results in Japan, which represents 18% of the jeweler's overall sales. As it turns out, the recovery there is better than expected. Net sales dropped only 3% excluding the impact from the strong yen. One analyst said he had expected the sales decline to be in the high teens, the Financial Times reported, and Tiffany said in March that sales there would fall 15%.

In all, Tiffany's first-quarter profit rose by 26% to $81.1 million, or 63 cents a share, up from $64.4 million, or 50 cents a share, in the year-ago period. Analysts were expecting 56 cents. If you exclude one-time charges and other items from both periods, the profit rose to 67 cents a share from 48 cents.

Sales rose 20% to $761 million, but excluding currency charges the increase was only 16%.

Tiffany seized upon the quarter to raise its full-year forecast to $3.45 to $3.55 a share. Analysts were only expecting $3.33 a share. In March, the jeweler had predicted earnings at $3.35 to $3.45 a share.

"The company continues to capitalize significantly upon not just strong, but improving worldwide demand trends for higher-end or luxury goods," one Oppenheimer analyst told MarketWatch.

Tiffany executives only showed one point of concern. The U.S. economy is hurting spending by some customers buying silver at entry-level price points, the company said, according to MarketWatch. The economy here will likely remain challenging for a while.