China Apparel and Beauty: El Niño: Less Negative Than Feared for Winter Apparel; Potential Upside for Outdoor and Sun Care

We hosted a call with a climatologist-commodities specialist on the winter outlook under El Nino. Our key takeaway is that the impact of El Niño on winter apparel demand could be less negative than feared, despite expectations of a warmer-than-normal winter in China. Intermittent cold spells could still encourage consumers to switch to heavier winter clothing; also, relatively dry weather conditions may support outdoor activities through winter and spring. Interestingly, greater outdoor activity could also likely create incremental opportunities for sun-care products. Meanwhile, the implications for cotton input costs appear mixed.