In a strategic initiative, Procter & Gamble (P&G) reveals plans to incur up to $2.5 billion in charges over two fiscal years, encompassing a writedown in the value of its Gillette business and a restructuring effort.
The consumer goods giant anticipates a $1.3 billion non-cash impairment charge before tax in the current quarter, specifically related to its Gillette business, which contributes around 8% to the company’s total sales. Despite challenges, P&G remains optimistic about the Gillette business, projecting a growth rate of approximately 5%, aligning with the growth observed over the past three years.
In tandem with the Gillette writedown, P&G will implement restructuring measures in its Argentina and Nigeria operations, expecting charges between $1 billion and $1.5 billion after tax. Macro-economic challenges in these markets, combined with a stronger dollar, are key factors influencing this decision. P&G aims to divest its fabric and home care business in Argentina and transition Nigeria into an import-only market.
The total charges, encompassing both the Gillette impairment and restructuring costs, will range between $2 billion and $2.5 billion after tax, recognized in fiscal years 2024 and 2025.
P&G’s fiscal 2023 net earnings stood at $14.7 billion, indicating its strategic response to market dynamics for sustained growth. Explore P&G’s forward-looking approach in navigating market challenges and steering towards long-term success.
