Procter & Gamble Co. (PG) remains committed to the shaving category via its well-known Gillette brand.
The consumer products giant said Tuesday it took an $8 billion write-down on the carrying value of Gillette’s goodwill in the most recent quarter. P&G pinned the blame on currency devaluations since it bought Gillette for $57 billion back in 2005. The company also cited ongoing tough competition in the razor blade category.
P&G has no plans to sell off the Gillette shaving care business, Chief Financial Officer Jon Moeller tells Yahoo Finance. Moeller highlighted the brand’s strong earnings and cash flow generation profile as one reason. The veteran P&G executive also said Gillette fits the company’s current focus on innovating around daily-use consumer product categories.
P&G has been challenged in the shaving care space for some time. Upstart razor blade companies such as Dollar Shave Club and Harry’s have made considerable inroads with consumers via cheap razors housed in slick packaging. P&G has sought to stem market share losses by lowering prices on its razors and highlighting product quality in TV commercials.
Performance of the grooming business remained mixed in the most recent quarter. Grooming segment organic volume fell 1% in the quarter, with organic sales up 4%. It was P&G’s worst showing among its business segments. Sales of appliances — mostly electric shavers — continued to be a bright spot, with sales up by a double-digit percentage.