Hey, Gillette — that’s one painful nick!
The 118-year-old razor maker’s parent company, Procter & Gamble, on Tuesday revealed it will take an $8 billion writedown on the men’s grooming brand.
One big problem, according to P&G: Millennial men aren’t shaving as often as their dads do.
“Lower shaving-frequency has reduced the size of the developed blades and razors market,” P&G Chief Financial Officer Jon Moeller said Tuesday on a call with analysts, referring to markets in the US and Europe.
In addition to beards and five-o’clock shadows, the strong dollar has slammed sales by sapping revenue from overseas markets.
To make matters worse, analysts say Gillette has faced stiff competition from upstart brands such as Dollar Shave Club, now owned by rival Unilever, and Harry’s.
Moeller said younger rivals had “much less of an impact” on its business than hirsute millennials. Nevertheless, “new competitors have entered at prices below the category average,” Moeller said.
On Tuesday, the Harry’s Web site was offering eight blades for $16, while Dollar Shave Club was hawking four fancy blades for $10. By comparison, an eight-pack of Gillette SkinGuard blades costs $21.
Wall Street largely overlooked the Gillette writedown, sending P&G shares to an all-time high as the conglomerate reported a strong quarter of organic sales.
P&G rose 3.8 percent Tuesday, to $120.41.