⚠ Still Susceptible to ImpairmentModerate threat

Procter & Gamble (PG) — threat to the moat

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.

The Gillette brand remains on P&G's balance sheet at a carrying value of $12.8 billion, and the company says it is still susceptible to impairment risk1. Its fair value exceeds the carrying value by greater than 10%2, a cushion rather than a comfortable margin.

Gillette brand fair value sensitivity (% change)-5%Discount rate +25bp-5%Growth rate -25bp-4%Royalty rate -50bpover 10%Current cushionP&G Form 10-K FY2026, critical accounting estimates
Two small moves would use the cushion.

P&G gives the sensitivities. A 25 basis point rise in the discount rate would cut the brand's fair value by about 5%; a 25 basis point fall in the growth rate would cut it by about 5%; a 50 basis point fall in the royalty rate by about 4%3. Grooming goodwill of $12,887 million is already net of $7.9 billion of accumulated impairment losses4.

The last charge, in fiscal 2024, was driven by a higher discount rate, weaker currencies and restructuring in Enterprise Markets5, none of which P&G controls fully.

The second charge was smaller than the first but came from the same place. In fiscal 2024 P&G wrote the Gillette brand down by $1.3 billion before tax, $1.0 billion after6. Grooming organic sales grew 1% in fiscal 20267, a pace that does little to widen the cushion.

A third charge would not change cash flow, but it would say the market for blades is smaller than P&G still assumes. Grooming's organic sales growth, 1% in fiscal 20268, is the number that feeds the valuation.

References
  1. ReportedThe Gillette brand remains on P&G's balance sheet at a carrying value of $12.8 billion, and the company says it is still susceptible to impairment risk.
    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. ReportedIts fair value exceeds the carrying value by greater than 10%, a cushion rather than a comfortable margin.
    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 ↗
  3. ReportedA 25 basis point rise in the discount rate would cut the brand's fair value by about 5%; a 25 basis point fall in the growth rate would cut it by about 5%; a 50 basis point fall in the royalty rate by about 4%.
    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 ↗
  4. ReportedGrooming goodwill of $12,887 million is already net of $7.9 billion of accumulated impairment losses.
    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 ↗
  5. ReportedThe last charge, in fiscal 2024, was driven by a higher discount rate, weaker currencies and restructuring in Enterprise Markets, none of which P&G controls fully.
    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 ↗
  6. ReportedIn fiscal 2024 P&G wrote the Gillette brand down by $1.3 billion before tax, $1.0 billion after.
    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 ↗
  7. ReportedGrooming organic sales grew 1% in fiscal 2026, a pace that does little to widen the cushion.
    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 ↗
  8. ReportedGrooming's organic sales growth, 1% in fiscal 2026, is the number that feeds the valuation.
    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 ↗
Sources
Generated September 26, 2026