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UPDATE 2-Tiffany's sales, profit beats Street on higher solitaire jewelry demand

demand@ (Adds background about company's prior performance, analyst comment; updates share price)

Nov 29 (Reuters) - Jeweler Tiffany & Co's sales and profit beat market estimates, helped by strong demand for its fashion and high-end solitaire jewelry in its first full quarter under new Chief Executive Alessandro Bogliolo.

Tiffany, whose traditional engagement and solitaire jewelry was popular among baby boomers, has been offering lower priced fashion jewelry in the past year after several quarters of declining sales in the category.

Price-conscious millennial shoppers drifting to stores and websites of newer players such as Denmark's Pandora A/S and online jeweler Blue Nile, which sell sterling silver jewelry starting from $35, have put more competitive pressure on Tiffany.

In response, the New York-based upscale jeweler refreshed its line of fashion jewelry to include cheaper-priced items, hired Tapestry's former creative chief Reed Krakoff to become part of the executive team and launched new high-end designs like the Tiffany T and the Tiffany HardWare collection, featuring pieces like a $12,000 link bracelet in 18k rose gold.

"New CEO Alessandro Bogliolo indicated there is potential in the medium to long-term for 'meaningful' comp store growth ...(potentially suggesting no need to reset earnings expectations at this time) and we tend to agree," ConsumerEdge Research analyst David Schick wrote in a note.

Tiffany said sales in the Americas, its biggest market, rose 1 percent in the third quarter, while sales from Asia-Pacific jumped 15 percent on strong demand in mainland China.

Total revenue rose 3 percent to $976.2 million.

However, the company reported an unexpected drop in overall comparable store sales.

Tiffany's comparable store sales declined 1 percent due to lower spending by foreign tourists in the Americas, while analysts on average were expecting an increase of 0.02 percent, according to Thomson Reuters I/B/E/S.

New York-based Tiffany's net income rose 5.4 percent to $100.2 million, or 80 cents per share, in the quarter ended Oct. 31.

Analysts on average had expected a profit of 76 cents per share and revenue of $957 million. The company's shares were marginally down at $93.73 before the bell on Wednesday. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Savio D'Souza, Bernard Orr)