Gillette: $9.6 Billion of Write-DownsNarrow moat

Procter & Gamble (PG) — moat facet

P&G has written about $9.6 billion off Gillette since 2019, yet Grooming still earns P&G's highest segment margin.

Gillette is the purchase P&G has paid most for since. The company bought The Gillette Company in 20051. In fiscal 2019 it recorded a non-cash charge of $8.3 billion before tax, $8.0 billion after tax, on its Shave Care business: $6.8 billion of goodwill and $1.6 billion on the Gillette brand2. In fiscal 2024 it wrote the Gillette brand down again, by $1.3 billion before tax3. Together that is about $9.6 billion4.

Grooming share of P&G (%)11%Sales FY20168%Sales FY202615%Earnings FY20169%Earnings FY2026P&G Forms 10-K FY2016 and FY2026, segment results
Earnings share almost halved in ten years.

The share story explains the charges. P&G's global share of blades and razors was nearly 65% in fiscal 20165, over 60% in fiscal 20196, and is now described as more than 60%7. Grooming was 11% of P&G's net sales and 15% of its net earnings in fiscal 20168; in fiscal 2026 it was 8% of sales and 9% of earnings9.

The business is still very profitable. Grooming earned a net margin of 22.1% in fiscal 2026, the highest of P&G's five segments10, and holds more than 50% of the global grooming market11. What it lost was growth: net sales rose from $6,419 million in fiscal 2023 to $6,918 million in fiscal 20261213, much of it from price.

A razor handle sold at a low price brings years of blade sales, and more than 60% of the world's blades is still a remarkable position. But a moat valued at a growth rate it no longer has gets written down, and Gillette's has been twice.

The brand value has kept shrinking since the first charge. After the fiscal 2019 impairment, Shave Care goodwill stood at $12.6 billion and the Gillette brand at $14.1 billion14; by 30 June 2026 the brand was carried at $12.8 billion15 after the second write-down. Each charge reset the book value to a lower view of the business's growth.

Read together, this is a narrowed moat that still earns well. Grooming net earnings, $1,529 million in fiscal 2026 and down 3%16, are the figure; another year of decline would bring the remaining brand value closer to a third charge.

Moat trajectory: Narrowing

Blade share from nearly 65% (FY2016) to more than 60%; Grooming earnings share 15% to 9%.

The number that tests this moat
Reported
Grooming net earnings, FY2026
$1,529M (-3%)

The profit behind the Gillette brand value; further declines would raise the risk of a third write-down.

Source: P&G Form 10-K, FY2026 ↗
⚠ Threats to the moat
⚠ THREAT 01
Still Susceptible to Impairment
Gillette's $12.8 billion brand value sits only a little more than 10% below its estimated worth, and two ordinary rate moves would erase the cushion.
References
  1. ReportedThe company bought The Gillette Company in 2005.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 1A risk factors, Item 5 market information and performance graph, and critical accounting estimates (Gillette brand). — FY2026 · publ. 4 August 2026 · source ↗
  2. ReportedIn fiscal 2019 it recorded a non-cash charge of $8.3 billion before tax, $8.0 billion after tax, on its Shave Care business: $6.8 billion of goodwill and $1.6 billion on the Gillette brand.
    Procter & Gamble Form 10-K for fiscal 2019 - the $8.3 billion Shave Care impairment, the Merck KGaA over-the-counter acquisition, five-year financial summary, segment shares, Walmart and top-ten customers. — FY2019 · publ. August 2019 · source ↗
  3. ReportedIn fiscal 2024 it wrote the Gillette brand down again, by $1.3 billion before tax.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - notes: restructuring, goodwill and intangibles, acquisitions and divestitures, subsequent events and commitments. — FY2026 · publ. 4 August 2026 · source ↗
  4. Moat Explorer calcTogether that is about $9.6 billion.
    Moat Explorer calculation from Procter & Gamble's reported figures ($ millions unless stated; fiscal years end 30 June). Net debt: FY2026 11,296 + 22,842 - 9,942 = 24,196; 24,196 / 54,311 = 0.45 times equity; 24,196 / 19,556 = 1.24 years of operating cash flow; debt due within one year 11,296 / (11,296 + 22,842) = 33% of debt; FY2025 9,513 + 24,995 - 9,556 = 24,952; FY2024 7,191 + 25,269 - 9,482 = 22,978. Capital spending 4,409 / 87,032 = 5.1% of net sales. Adjusted free cash flow over dividends 15,835 / 10,232 = 1.55 times. Dividends paid over net earnings attributable: 10,232 / 16,046 = 63.8% (FY2026); 9,872 / 15,974 = 61.8% (FY2025); 9,312 / 14,879 = 62.6% (FY2024). Buybacks 5,028 / 11,009 = 45.7% of the FY2021 peak. Peer market values on 25 September 2026 ($bn): 132.99 + 68.60 + 34.19 + 34.18 + 32.74 + 22.86 + 10.13 = 335.69, against P&G 339.64; P&G / Clorox 339.64 / 10.13 = 33.5 times. P/E: 339.64 / 16.046 = 21.2 (now); 394.82 / 14.879 = 26.5 (December 2024 over FY2024). Free cash flow yield 15,835 / 339,640 = 4.7%. Goodwill plus Gillette brand 41,276 + 12,800 = 54,076; 54,076 / 126,521 = 42.7% of total assets. Segments (five reportable, excluding Corporate): FY2026 sales 16,023 + 6,918 + 12,456 + 30,314 + 20,401 = 86,112; net earnings 2,672 + 1,529 + 2,404 + 5,632 + 3,930 = 16,167; FY2025 net earnings 2,715 + 1,577 + 2,440 + 5,848 + 4,013 = 16,593; 16,167 / 16,593 - 1 = -2.6%. Segment net earnings changes FY2026: Beauty 2,672 / 2,715 - 1 = -1.6%; Grooming 1,529 / 1,577 - 1 = -3.0%; Health Care 2,404 / 2,440 - 1 = -1.5%; Fabric & Home Care 5,632 / 5,848 - 1 = -3.7%; Baby, Feminine & Family Care 3,930 / 4,013 - 1 = -2.1%. Fabric & Home Care share of segment net earnings 5,632 / 16,167 = 34.8%. Pre-tax margins FY2026: Beauty 3,473 / 16,023 = 21.7%; Grooming 1,966 / 6,918 = 28.4%; Health Care 3,163 / 12,456 = 25.4%; Fabric & Home Care 7,290 / 30,314 = 24.0%; Baby, Feminine & Family Care 5,145 / 20,401 = 25.2%. Net margins FY2023: Beauty 3,178 / 15,008 = 21.2%; Health Care 2,125 / 11,226 = 18.9%; Fabric & Home Care 4,828 / 28,371 = 17.0%; Baby, Feminine & Family Care 3,545 / 20,217 = 17.5%. Three-year growth FY2023-FY2026: Health Care sales 12,456 / 11,226 - 1 = 11.0%; Health Care net earnings 2,404 / 2,125 - 1 = 13.1%; Grooming sales 6,918 / 6,419 - 1 = 7.8%; Baby, Feminine & Family Care sales 20,401 / 20,217 - 1 = 0.9%. Segment capital spending over sales FY2026: Grooming 540 / 6,918 = 7.8%; Baby, Feminine & Family Care 1,520 / 20,401 = 7.5%; Health Care 592 / 12,456 = 4.8%; Fabric & Home Care 1,250 / 30,314 = 4.1%; Beauty 415 / 16,023 = 2.6%. Geography FY2026 ($bn): international 45.3 / 87.0 = 52.1%; United States 41.7 / 87.0 = 47.9%. Walmart about 16% x 87,032 = 13,925, about $13.9 billion. Top ten customers less Walmart (rounded percentages): FY2017 35 - 16 = 19; FY2020 38 - 15 = 23; FY2023 40 - 15 = 25; FY2026 43 - 16 = 27. Dividend per share 4.2589 / 4.0763 - 1 = 4.5% (FY2026); 4.0763 / 3.8286 - 1 = 6.5% (FY2025). Market exit charges after tax 1,200 + 131 = 1,331. P&G / Unilever market value 339.64 / 132.99 = 2.6 times. Restructuring charges FY2024-FY2026 659 + 1,114 + 1,230 = 3,003. Gillette write-downs 8.3 + 1.3 = 9.6 billion. Operating margin 19,748 / 87,032 = 22.7% (FY2026); 20,451 / 84,284 = 24.3% (FY2025) - growth rates, margins and charges. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Procter & Gamble's Forms 10-K, results releases, earnings slides and market data; operands shown in the source line.
  5. ReportedP&G's global share of blades and razors was nearly 65% in fiscal 2016, over 60% in fiscal 2019, and is now described as more than 60%.
    Procter & Gamble Form 10-K for fiscal 2016 - the portfolio reduction to about 65 brands, the Duracell exchange with Berkshire Hathaway, segment shares and blade share. — FY2016 · publ. August 2016 · source ↗
  6. ReportedP&G's global share of blades and razors was nearly 65% in fiscal 2016, over 60% in fiscal 2019, and is now described as more than 60%.
    Procter & Gamble Form 10-K for fiscal 2019 - the $8.3 billion Shave Care impairment, the Merck KGaA over-the-counter acquisition, five-year financial summary, segment shares, Walmart and top-ten customers. — FY2019 · publ. August 2019 · source ↗
  7. ReportedP&G's global share of blades and razors was nearly 65% in fiscal 2016, over 60% in fiscal 2019, and is now described as more than 60%.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Note 2 segment information: net sales, earnings before tax, net earnings, margins, capital spending and depreciation by segment. — FY2026 · publ. 4 August 2026 · source ↗
  8. ReportedGrooming was 11% of P&G's net sales and 15% of its net earnings in fiscal 2016; in fiscal 2026 it was 8% of sales and 9% of earnings.
    Procter & Gamble Form 10-K for fiscal 2016 - the portfolio reduction to about 65 brands, the Duracell exchange with Berkshire Hathaway, segment shares and blade share. — FY2016 · publ. August 2016 · source ↗
  9. ReportedGrooming was 11% of P&G's net sales and 15% of its net earnings in fiscal 2016; in fiscal 2026 it was 8% of sales and 9% of earnings.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 7 MD&A and segment note: segment contents, operating segments and shares of net sales and net earnings. — FY2026 · publ. 4 August 2026 · source ↗
  10. ReportedGrooming earned a net margin of 22.1% in fiscal 2026, the highest of P&G's five segments, and holds more than 50% of the global grooming market.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 7 MD&A: market shares and competitive activity by category. — FY2026 · publ. 4 August 2026 · source ↗
  11. ReportedGrooming earned a net margin of 22.1% in fiscal 2026, the highest of P&G's five segments, and holds more than 50% of the global grooming market.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 7 MD&A: market shares and competitive activity by category. — FY2026 · publ. 4 August 2026 · source ↗
  12. ReportedWhat it lost was growth: net sales rose from $6,419 million in fiscal 2023 to $6,918 million in fiscal 2026, much of it from price.
    Procter & Gamble Form 10-K for fiscal 2025 - segment results for fiscal 2023, net sales drivers, Walmart share, top-ten customers and debt at June 2024 and 2025. — FY2025 · publ. August 2025 · source ↗
  13. ReportedWhat it lost was growth: net sales rose from $6,419 million in fiscal 2023 to $6,918 million in fiscal 2026, much of it from price.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 7 MD&A: net sales drivers, organic sales and gross margin bridge. — FY2026 · publ. 4 August 2026 · source ↗
  14. ReportedAfter the fiscal 2019 impairment, Shave Care goodwill stood at $12.6 billion and the Gillette brand at $14.1 billion; by 30 June 2026 the brand was carried at $12.8 billion after the second write-down.
    Procter & Gamble Form 10-K for fiscal 2019 - the $8.3 billion Shave Care impairment, the Merck KGaA over-the-counter acquisition, five-year financial summary, segment shares, Walmart and top-ten customers. — FY2019 · publ. August 2019 · source ↗
  15. ReportedAfter the fiscal 2019 impairment, Shave Care goodwill stood at $12.6 billion and the Gillette brand at $14.1 billion; by 30 June 2026 the brand was carried at $12.8 billion after the second write-down.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Item 1A risk factors, Item 5 market information and performance graph, and critical accounting estimates (Gillette brand). — FY2026 · publ. 4 August 2026 · source ↗
  16. ReportedGrooming net earnings, $1,529 million in fiscal 2026 and down 3%, are the figure; another year of decline would bring the remaining brand value closer to a third charge.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Note 2 segment information: net sales, earnings before tax, net earnings, margins, capital spending and depreciation by segment. — FY2026 · publ. 4 August 2026 · source ↗
Sources
Generated September 26, 2026