P&G to record up to $2.5B in Gillette writedown, operations rejig
A plant wall with Procter & Gamble’s logo is pictured at the entrance to the company’s highly automated cleaning products factory in Tabler Station, West Virginia, U.S., May 28, 2021. REUTERS/Timothy Aeppel/File photo
Procter & Gamble said on Tuesday it would record up to $2.5 billion in charges over two fiscal years as it writes down the value of its Gillette business and restructures certain markets.
The company’s shares fell about 2 percent in early trade.
The consumer goods giant said it would take a $1.3 billion non-cash impairment charge before tax in the current quarter ending Dec. 31 on its Gillette business.
P&G, which bought Gillette for $57 billion in 2005, gets about 8 percent of its total sales from the grooming business.
The company expected its Gillette business to grow in the range of 5 percent, Chief Financial Officer Andre Schulten said at a Morgan Stanley conference on Tuesday, in line with growth over the last three years.
In 2019, P&G took an $8 billion charge on the unit due to currency fluctuations.
The company said it expects charges of between $1 billion and $1.5 billion after tax related to the restructuring of its Argentina and Nigeria operations as it deals with difficult macroeconomic conditions.
P&G also blamed a stronger dollar for the twin charges.
“It’s very difficult for us as a U.S. dollar-denominated company to create value (in these markets),” Schulten said.
P&G said it was looking to divest its fabric and home care business in Argentina and turn Nigeria into an import-only market.
Total charges will be between $2 billion and $2.5 billion after tax and will be recognized in fiscal years 2024 and 2025.
Net earnings attributable to the company was $14.7 billion for fiscal 2023.
