UBS Economists' estimates for household consumption and GDP % year over year growth – pre-COVID-19 lockdown (February 2020 vs. post-COVID-19 lockdown (April 2020)
Incorporating COVID-19 impact on the apparel sector growth
COVID-19 is resulting in ~91% month over month weekly sales decline in the apparel sector since mid-March. UBS Economists cut 2020 estimates for household consumption growth to -1.5% (from +1.9%), which would imply a -4.6% apparel sales (from +1.9%) based on our retail sales regression model. The current crisis caused the Brazil risk-free rate to increase 80bps to 4.5% and apparel stock prices to fall ~50% YTD. Government measures are progressing, but lockdown extension is still in discussion.