Procter & Gamble cut its annual profit forecast due to a writedown in the value of its Gillette business, but strong margins during the second quarter boosted its shares by more than 5%. The company's profit margins held up better than expected, with demand for daily-use products driving overall volumes up in the United States and Europe. Despite a $1.3 billion charge related to the Gillette business, P&G's core profit beat estimates at $1.84 per share, but its net sales missed estimates due to slowing demand in China.
Procter & Gamble's revenue for the fiscal second quarter of 2024 rose 3%, falling short of expectations, with earnings per share at $1.84 adjusted compared to the expected $1.70 and revenue at $21.44 billion versus the expected $21.48 billion. The company narrowed its full-year adjusted earnings per share outlook and plans to write down Gillette's value by $1.3 billion, as part of its restructuring efforts in certain markets.
Procter & Gamble is taking a $1.3 billion charge on its Gillette business, which it acquired for $54 billion in 2005. The shaving giant has struggled in recent years due to competition from lower-priced upstarts like Dollar Shave Club and Harry's. P&G estimated the value of its grooming business to be around $14.1 billion as of June 2023.
Procter & Gamble (P&G) will incur up to $2.5 billion in charges for a restructuring and impairment related to its Gillette business. The restructuring will primarily affect certain enterprise markets, including Argentina and Nigeria, to address challenging macroeconomic conditions. P&G expects the charges to be recognized in the 2024 and 2025 fiscal years, with an initial charge recorded in the current quarter. While the underlying performance of the Gillette business remains strong, future adverse changes in the business or macroeconomic environment may trigger additional impairment charges. P&G shares fell 3.5% in response to the news.
Procter & Gamble (P&G) announced it will incur charges of up to $2.5 billion over two fiscal years due to a writedown of its Gillette business and the restructuring of certain markets. P&G will take a $1.3 billion non-cash impairment charge on its Gillette business in the current quarter. The company also expects charges of $1 billion to $1.5 billion related to the restructuring of its operations in Argentina and Nigeria. P&G blames difficult macroeconomic conditions and a stronger dollar for the charges. The total charges will be recognized in fiscal years 2024 and 2025.
Procter & Gamble (P&G) announced it will incur charges of up to $2.5 billion over two fiscal years due to a writedown of its Gillette business and the restructuring of certain markets. P&G will take a $1.3 billion non-cash impairment charge on Gillette in the current quarter, and expects charges of $1 billion to $1.5 billion related to the restructuring of its operations in Argentina and Nigeria. The company attributes the charges to difficult macroeconomic conditions and a stronger dollar. P&G plans to divest its fabric and home care business in Argentina and turn Nigeria into an import-only market.
Procter & Gamble expects to incur over $2 billion in charges for a limited restructuring and impairment related to Gillette. The charges include after-tax restructuring charges of $1.0 billion to $1.5 billion to address challenging macroeconomic conditions in enterprise markets, as well as a $1.3 billion pretax noncash impairment charge due to a reduction in the estimated fair value of the Gillette intangible asset. The company attributes the impairment to a higher discount rate, weakening currencies, and the impact of the restructuring program. P&G's stock fell 2.8% following the announcement.
Gillette and Razer have collaborated to create a limited-edition razor for gamers, featuring Razer's branding and color scheme. The razor is based on Gillette's five-blade GilletteLabs with Exfoliating Bar, but lacks RGB lighting. The product will be available worldwide at the end of August, with the option of purchasing Razer-branded refill blades. Pricing will be determined by retailers.
