P&G takes $8 billion write-down on Gillette

[maheshwari]

P&G stock rose after reporting strong sales this morning, even after taking an $8 billion write-down on Gillette. How would losing Gillette affect P&G?

How does that write-down rank in all-time marketing screw-ups?

https://finance.yahoo.com/news/p-g-posts-strong-profit-125800145.html

 

[tory]

@maheshwari People are tired of paying those razor blade prices. I clean shave on occasion now, got a trimmer, look a bit rugged once in a while luckily job doesn't require business formal everyday. Wonder if those monthly online delivery blades are worth it, not that I need new ones each month.

 

[tristana]

@tory I use Dollar Shave Club and they ship me 4 razors every other month. Super cheap, and I've never had an issue with their quality.

 

[jenlousie]

@tristana same, ive got more razors than I know what to do with and its so cheap. customer support is helpful too if you ever have a problem.

 

[resjudicata]

@tory Even if you want to use a razor the generic ones from any grocery chain are just as good and much cheaper.

 

[hugntran2401]

@tory Harry's started offering their products at the Wal-Mart near where I live, so I'm going to give them a shot when my current set dulls.

I'm not sure you'd save a tangible amount going online vs in-store since there are a lot of cheaper brands appearing in-store as well, but I guess the deciding factor will be quality.

 

[thytotodile]

@maheshwari Had no idea about the ad. I thought it was new players like Dollar Shave Club eating their lunch.

 

[resjudicata]

@thytotodile The ad had little impact on their bottom line. Customers figuring out that there are way cheaper alternatives along with society becoming more accepting of the non-clean shaven man is what is hurting their bottom line.

Many Professionals are no longer expected to shave daily compared to the past as dress codes have become less strict which means fewer shaves and fewer razor blade purchases. Combine that will multiple competitors undercutting Gillette in price means lots of lost business.

 

[kirankumar]

@resjudicata

The ad had little impact on their bottom line.

Incorrect. Almost every man I know stopped buying Gillette products (some went as far as to avoid P&G) - myself included. We all have the same reason - the ads.

I didn't care about price or anything, so it wasn't that other brands were cheaper. In fact, I honestly couldn't tell you how much it costs, although I had been buying them for 20 years. I just..never checked the price.

They went waaaaaay too far with their BS and what happened was that they upset a majority to try to appeal to a minority that wasn't going to buy their products anyway.

They fucked up and they won't admit it. Fine with me, I already switched - and it actually took some effort to even find out about other brands.

 

[godhasmynumber]

@thytotodile It is. Don't let the agenda driven morons convince you otherwise. The marketing wasn't even a blip on most people's radars.

 

[libra111]

@thytotodile Don’t they own dollar shave club now?

 

[hugoeisenhour]

@thytotodile How is the ad left wing anyways?

Edit: no response just angry downvotes

 

[emmaforchrist]

@hugoeisenhour "Don't be a dick" is now left wing propaganda apparently.

 

[fleplegek]

@maheshwari PG is an interesting stock. It's kind of amazing to see a company growing at 3% trading at 25x forward earnings.

 

[williame300]

@fleplegek The market wants people to pay a premium for perceived stability.

 

[fleplegek]

@williame300 Right. I get it. I still didn't expect a 5% move on earnings for a company like PG

 

[andrew89]

@fleplegek plot the share price vs the 10 year bond and it will make the picture much more dull... it's just investors looking for safe yields .

 

[peaceandquiet]

@maheshwari what does "write-down" mean

 

[byu123]

@peaceandquiet Do you know what a "write-off" is?

Well it's just like that, but downward.

Joking aside, it's when a company notes a material change in asset values it carries on its books. So this whole time, P&G was reporting Gillette at an estimated worth of X. But due to "unforeseen" developments, now has reason to believe it should be valued at $8B less.

 

[peaceandquiet]

@byu123 I see, TY