Richemont reported better-than-expected quarterly sales, triggering a rally in luxury stocks, after its core jewelry division bucked a downturn in demand for high-end goods.

The struggling European luxury-goods sector roared to life Thursday after Richemont reported its highest-ever quarterly sales as it blew by analyst estimates.

European luxury shares soared on Thursday as Cartier owner Richemont's third-quarter sales beat revived optimism for the battered sector.