By Stacy Meichtry

PARIS -- Shares across Europe's luxury-goods sector hit record highs Wednesday after LVMH Moët Hennessy Louis Vuitton SE reported a strong rebound in first-quarter sales, defying the pandemic's drag on the global economy.

Shoppers in China and the U.S., where a rapid vaccine rollout has led to eased restrictions, are fueling strong demand for leather goods at Louis Vuitton, Dior and other brands owned by LVMH. Sales at LVMH reached 14 billion euros, equivalent to $16.75 billion, over the first three months of 2021, a 30% increase compared with a year earlier, stripping out the effect of currency changes and its acquisition of U.S. jeweler Tiffany. The first-quarter sales were 8% higher than the same period in 2019, before the pandemic.

LVMH's status as a bellwether of the luxury industry helped lift shares across the sector to all-time highs on Wednesday. LVMH shares increased 3.2% to EUR614, Gucci parent Kering SA rose 2.7% to EUR644 and Cartier owner Compagnie Financière Richemont SA jumped 3% to 96.68 Swiss francs.

LVMH's market value rose above EUR300 billion this week for the first time, solidifying its status as Europe's most valuable company, ahead of consumer-goods giant Nestle SA and pharmaceutical company Roche Holdings AG, as well as the continent's oil majors and banks.

The pandemic is accelerating a shift in stock-market fortunes as the luxury business eclipses sectors that were once at the core of the European economy. Banks are struggling to adapt to new post-financial-crisis regulations. Auto makers are grappling with new regulations aimed at slashing carbon emissions. Big oil companies are subject to the whims of turbulent energy markets.

LVMH, which owns 75 brands, has created a mass market for luxury by selling goods with a range of prices that can attract consumers who vary in age and income. Louis Vuitton sells leather goods starting at a few hundred dollars as well as handbags that cost thousands. A bottle of Hennessy cognac, meanwhile, sells for as little as $25.

When the pandemic gripped Europe last year, a freeze in international travel had investors worried the luxury sector was heading for dire straits. LVMH and other luxury behemoths have long relied on tourist traffic in fashion capitals around the world to drive their sales. Chinese shoppers that once arrived by the busload vanished from boutiques in Paris and Milan. Since then, Europe's sluggish vaccine rollout has resulted in the return of lockdown restrictions in France, Italy and other parts of the continent.

LVMH, however, has largely managed to shrug off the pandemic's impact in Europe due to its expansion in China and the U.S. In recent years, the luxury giant has worked to expand its e-commerce operations and open new stores in China and beyond, making it less dependent on Europe.

LVMH said its first-quarter sales in Asia, excluding Japan, increased 86% compared with the same period last year and 26% from the first quarter of 2019. In the U.S., sales rose 23% compared with the first quarter of 2020 and 15% from the first three months of 2019.

"There was clearly a benefit from accelerating U.S. demand supported by recent stimulus," wrote analysts at Hamburg-based Berenberg Bank.

Louis Vuitton and other LVMH brands are also better at weathering economic turmoil because they specialize in handbags and other leather goods that are less sensitive to fashion trends. Stripping out currency swings, sales in LVMH's fashion and leather-goods division rose 52% from a year earlier to EUR6.7 billion in the first quarter.

The company's wines and spirits unit, which includes Hennessy cognac and Moët & Chandon Champagne, logged a 36% increase while its jewelry and watches business rose 35%, stripping out the effects of the Tiffany acquisition.

--Olivia Bugault contributed to this article.

Write to Stacy Meichtry at stacy.meichtry@wsj.com

(END) Dow Jones Newswires

04-14-21 1022ET