tiffany and co. said its fiscal third-quarter profit rose 23 percent on strong u.s. sales, despite weakness at its stores in japan. the upscale jeweler also boosted its full-year outlook, as its holiday selling season has gotten off to a better-than-expected start. the new york-based retailer, known for its robin's egg-blue boxes, said net income for the quarter ended oct. 31 rose to $29.1 million (euro22.12 million), or 21 cents a share, from $23.8 million nice jewelry (euro18.09 million), or 16 cents a share, a year earlier. excluding a tax benefit and a gain on a securities sale, earnings for the latest period were 18 cents a share, beating analysts' expectations by 2 cents a share, as compared to the average estimate in a thomson financial survey. shares of tiffany rose $2.29, or 6.37 percent, to close at $38.22 on the new york stock exchange wednesday. tiffany jewellery revenue rose 9.5 percent to $547.8 million (euro416.36 million) in the latest quarter. same-store sales, or sales at nice jewelries for cheap stores open at least a year, rose 6 percent in the united states as the company successfully raised its prices while selling more jewelry. a new line of designer jewelry by architect frank gehry has been selling been better than expected, and sales at the new york flagship store on manhattan's fifth avenue, whose multiyear renovation was completed this fall, were up 13 percent. however, tiffany earrings also noted that in u.s. stores the strongest growth was driven by purchases of items costing $20,000 (euro15,201) and up. sales of lower-priced pieces, which carry higher margins, didn't grow as fast. in japan tiffany's largest international market, which accounts for nearly 20 percent of its business sales fell 8 percent, with same-store sales off 9 percent. despite upbeat reports on japan's economy, "it appears that the environment for consumer spending is challenging," tiffany spokesman mark aaron said during a conference call wednesday. tiffany sees discount luxury cuff room to boost sales with "a more proactive, customer-engaging sales approach," he said. excluding japan, sales overseas rose 9 percent to $221.7 million (euro168.5 million) on solid growth in the asia-pacific region outside japan as well as in europe. in london, which represents more than half of european sales, business was strong at all four stores, tiffany said. in the holiday period thus far, tiffany said same-store sales have exceeded its high-single digit percentage expectations. the company now expects to earn $1.79 (euro1.36) to $1.84 (euro1.40) a share for the year, up from its previous outlook of $1.77 (euro1.35) to $1.82 (euro1.38) a share. the outlook assumes a 10 percent total sales increase, and a decline in fourth-quarter gross margin. gross margin in the third quarter fell half a percentage point to 53.6 tiffany women cufflinks percent of gold tiffany earrings total sales, hurt by wholesaling of diamonds and higher costs for precious metals. inventory has increased slightly more than expected this year. "however, we do expect sales results to benefit from high, in-store availability levels," chief financial officer jim fernandez said during wednesday's conference call. james covert is a correspondent of dow jones newswires