Procter & Gamble To Take $2.5 Billion Restructuring Charge

Gillette continues to cut into Procter & Gamble's results. The world's largest consumer products company will take up to $2.5 billion in charges over the next two fiscal years related to a restructuring of some operations and impairment costs.

The company said in a regulatory filing Tuesday that the restructuring would take place primarily in certain enterprise markets, including Argentina and Nigeria, “to address challenging macroeconomic and fiscal conditions.”

P&G said those costs would be in the range of $1.0 billion to $1.5 billion after tax, and would be recognized in the 2024 and 2025 fiscal years, with initial charges recognized in the current quarter.

The company added that also in this quarter it would record a $1.3 billion pretax ($1.0 billion after-tax) non-cash impairment charge on “intangible assets acquired as part of the company’s 2005 acquisition of The Gillette Company.”

P&G explained that impairment charge was related to “a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate,” as well as weakening of several currencies relative to the US dollar and the impact of the restructuring program.

The company warned in the regulatory filing that while the underlying performance of the Gillette business remains strong, “future adverse changes in the business or macroeconomic environment may trigger a further impairment charge.”

In recent years, Gillette's premium shave position has been undercut by a host of competitors offering lower-priced systems. For example, Dollar Shave Club burst on the men's grooming scene more than a decade ago and was acquired by Unilever in 2016. Earlier this year, Unilever sold DSC to Nexus Capital Management.

Related Content

Gillette Patents Shaving Device with Antioxidant

Gillette Named Official Men's Grooming Partner of the New York Yankees

Dollar Shave Club Introduces Two Electric Grooming Tools to Product Portfolio