PARIS, July 22 Reuters Freespending tourists in Europe are expected to drive brisk second quarter sales at French luxury groups LVMH, Gucciowner Kering and Hermes, helping to offset the impact of disruptions in China from COVID19 restrictions.

Highend French and Italian fashion houses have been riding a wave of strong, postpandemic demand for designer labels, with shoppers still eager to spend savings from lockdowns despite turbulent stock markets and rising prices.

The euros slide versus the dollar, which is likely to boost earnings for luxury companies producing in Europe, is encouraging visiting Americans to spend more.

American consumers are travelling to Europe like theres no tomorrow, said Mario Ortelli of luxury mergersandacquisitions advisory firm Ortelli Co, predicting they will boost the sectors sales on the continent.

Investors will be looking out for signs of waning appetite for designer brands as well as plans by the luxury goods companies for further price increases, which are aimed at protecting margins.

We continue to see outsized highend demand in the market, as consumers of all nationalities emerge from the pandemic in a youonlyliveonce mood. This has yet to normalise, said Bernstein analyst Luca Solca, who expects such normalisation to start in the second half of this year.

Lockdowns in China could still cast a cloud over the earnings. In China, the sector39;s sales were down by much as 40 over the quarter, based on estimates from Barclays,…