Your sink cabinet has a soul... and it's filled with Tide, Febreeze, Bounty, and Tampax. They're some of the VIP brands behind Procter & Gamble. The stock rose 4% after its earnings were released, but P&G also reported one huge number: a $5.4B loss — that's because it reevaluated and adjusted the value of its Gillette razor brand big-time:
- 2005: P&G acquires Gillette for a smooth $57B.
- Right now: P&G has adjusted Gillette's valuation down by hefty $8B.
Blame beards... P&G claims "lower shaving frequency" is behind Gillette's decline, jumping on the "because Millennials" bandwagon. Shaving happens less often (down 11% in the last 5 years) and with cheaper razors — Dollar Shave Club (now owned by Unilever) and Harry's (acquired by Edgewell Personal Care) have snagged Gillette's market share. Sophisticated, "Mach-filled," 20-blade razors are out.
Pricing is power... Despite #GilletteProblems, we mentioned P&G's stock rose 4%. That's because sales surged 7% — the biggest jump in over a decade. Half that rise comes from P&G charging higher prices from detergent to tampons (the other half is just selling more of them). The conglomerate has been raising prices, but consumers keep paying. That's power you can't buy.