SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934


  For Quarter Ended March 31, 1999           Commission File Number 1-922


                              THE GILLETTE COMPANY
             (Exact name of registrant as specified in its charter)


Incorporated in Delaware                                    04-1366970 
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)



Prudential Tower Building, Boston, Massachusetts                        02199
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code                (617) 421-7000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
                                             Yes   X          No______


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.


Title of each class


Common Stock, $1.00 par value

Shares Outstanding March 31, 1999  . . . . . . . . . . . . . . 1,109,122,807



<PAGE>
<TABLE>
                                     PAGE 1
                          PART I. FINANCIAL INFORMATION

                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                        CONSOLIDATED STATEMENT OF INCOME
                      (Millions, except per share amounts)

                                   (Unaudited)
<CAPTION>

                                                       Three Months Ended
                                                            March 31
                                                       ------------------
                                                         1999      1998
                                                         ----      ----
<S>                                                  <C>       <C>

Net Sales ..........................................   $ 1,939    $ 2,025
Cost of Sales ......................................       693        783
                                                       -------    -------
    Gross Profit ...................................     1,246      1,242

Selling, General and Administrative Expenses .......       799        808
                                                       -------    -------
    Profit from Operations .........................       447        434

Nonoperating Charges (Income):
  Interest income ..................................        (2)        (1)
  Interest expense .................................        28         17
  Exchange .........................................         9          6
  Other charges - net ..............................         -         (2)
                                                       -------    -------
                                                            35         20
                                                       -------    -------
    Income before Income Taxes .....................       412        414

Income Taxes .......................................       143        146
                                                       -------    -------

    Net Income .....................................       269        268
                                                       =======    =======

Net Income per common share
    Basic ..........................................   $   .24    $   .24
    Assuming full dilution .........................   $   .24    $   .23

Dividends per common share
    Declared .......................................   $     -    $     -
    Paid ...........................................   $ .1275    $ .1075

Weighted average number of common shares outstanding
    Basic ..........................................     1,107      1,122
    Assuming full dilution .........................     1,132      1,152
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



<PAGE>
<TABLE>
                                     PAGE 2
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                     ASSETS
                              (Millions of dollars)

<CAPTION>


                                                       March 31,    December 31,
                                                         1999           1998                                                  
                                                     ------------   ------------

                                                      (Unaudited)
<S>                                                    <C>            <C>
Current Assets:
  Cash and cash equivalents ........................     $   102      $   102
  Receivables, less allowances 1999-$67; 1998-$79...       2,322        2,943
  Inventories:
     Raw materials and supplies ....................         229          244
     Work in process ...............................         274          232
     Finished goods ................................       1,317        1,119
                                                         -------      -------
           Total Inventories .......................       1,820        1,595
  Deferred income taxes ............................         530          517
  Prepaid expenses .................................         298          283
                                                         -------      -------
           Total Current Assets ....................       5,072        5,440
                                                         -------      -------

Property, Plant and Equipment, at cost .............       5,551        5,705
   Less accumulated depreciation ...................       2,190        2,233
                                                         -------      -------
        Net Property, Plant and Equipment ..........       3,361        3,472
                                                         -------      -------

Intangible Assets, less accumulated amortization ...       2,409        2,448

Other Assets .......................................         617          542
                                                         -------      -------

                                                         $11,459      $11,902
                                                         =======      =======
</TABLE>



See Accompanying Notes to Consolidated Financial Statements.


<PAGE>
<TABLE>
                                     PAGE 3
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                              (Millions of dollars)

<CAPTION>

                                                       March 31,    December 31,
                                                          1999          1998                                         
                                                     ------------    -----------
                                                      (Unaudited)
<S>                                                <C>                <C>
Current Liabilities:
  Loans payable ....................................   $    755       $    981
  Current portion of long-term debt ................         36              9
  Accounts payable .................................        536            606
  Accrued liabilities ..............................      1,276          1,423
  Dividends payable ................................          -            141
  Income taxes .....................................        201            318
                                                       --------       --------
     Total Current Liabilities .....................      2,804          3,478
                                                       --------       --------

Long-Term Debt .....................................      2,277          2,256
Deferred Income Taxes ..............................        435            411
Other Long-Term Liabilities ........................        870            898
Minority Interest ..................................         39             39

Contingent Redemption Value of Common Stock
  Put Options ......................................        328            277

Stockholders' Equity:
  8.0% Cumulative Series C ESOP Convertible
    Preferred, without par value, issued: 1999,
    147,581 shares; 1998, 148,627 shares ...........         89             90
  Unearned ESOP compensation .......................        (10)           (10)
  Common stock, par value $1.00 per share:
    Authorized 2,320,000,000 shares
    Issued: 1999, 1,361,546,297 shares;
            1998, 1,357,913,938 shares .............      1,362          1,358
  Additional paid-in capital .......................        648            621
  Earnings reinvested in the business ..............      5,797          5,529
  Accumulated other comprehensive income ...........     (1,009)          (873)
  Treasury stock, at cost: 1999, 252,423,490 shares;
            l998, 252,507,187 shares ...............     (2,171)        (2,172)
                                                       --------       --------
          Total Stockholders' Equity ...............      4,706          4,543
                                                       --------       --------
                                                       $ 11,459       $ 11,902
                                                       ========       ========
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.


<PAGE>
<TABLE>
                                     PAGE 4
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                              (Millions of dollars)
                                   (Unaudited)
<CAPTION>                                                   Three Months Ended
                                                                March 31
                                                            -----------------                                        
                                                            1999         1998
                                                            ----         ----                                      
<S>                                                     <C>         <C>
Operating Activities
    Net income ....................................        $ 269        $ 268
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization ...............          121          116
      Other .......................................            1           (3)
      Changes in assets and  liabilities,  net of
      effects from acquisition of businesses:
        Accounts receivable .......................          616          413
        Inventories ...............................         (240)        (226)
        Accounts payable and accrued liabilities ..         (175)        (197)
        Other working capital items ...............         (197)         107
        Other noncurrent assets and liabilities ...          (74)         (44)
        Funding German pension plans...............            -         (252)
                                                           -----        -----
          Net cash provided by operating activities          321          182
                                                           -----        -----
Investing Activities
    Additions to property, plant and equipment ....         (173)        (193)
    Disposals of property, plant and equipment ....           54           30
    Other .........................................            1            1
                                                           -----        -----
         Net cash used in investing activities ....         (118)        (162)
                                                           -----        -----
Financing Activities
    Purchase of treasury stock ....................            -            -
    Proceeds from sale of put options .............           16            -
    Proceeds from exercise of stock option and
         purchase plans ...........................           61           32
    Increase(Decrease) in long-term debt ..........          668          (12)
    Increase(Decrease) in loans payable ...........         (809)          70
    Dividends paid ................................         (142)        (122)
                                                           -----        -----
         Net cash used in financing activities ....         (206)         (32)
                                                           -----        -----
Effect of Exchange Rate Changes on Cash ...........            3            -
                                                           -----        -----
Increase(Decrease) in Cash and Cash Equivalents ...            -          (12)
Cash and Cash Equivalents at Beginning of Year ....          102          105
                                                           -----        -----
Cash and Cash Equivalents at End of Quarter .......        $ 102        $  93
                                                           =====        =====
Supplemental disclosure of cash paid for:
    Interest ......................................        $  30        $  25
    Income taxes ..................................        $  43        $  52

</TABLE>
See Accompanying Notes to Consolidated Financial Statements.

<PAGE>

                                     PAGE 5
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                              (Millions of dollars)
                                   (Unaudited)

                                             Three Months Ended
                                                   March 31    
                                             ------------------                 
                                               1999        1998
                                               ----        ---- 

Net Income                                    $ 269       $ 268

Other Comprehensive Income, net of tax:
  Foreign Currency Translation Adj.            (136)         24
                                                ---         ---

Comprehensive Income                          $ 133       $ 292
                                                ===         ===

Foreign currency translation  adjustments are after favorable  (unfavorable) tax
effects for three months in 1999,  $(54)  million and three  months in 1998,  $3
million.

Accumulated Other Comprehensive Income
--------------------------------------
The accumulated balances for the components of Other Comprehensive Income are:
<TABLE>
                                                                   Accumulated
                                      Foreign                         Other
                                      Currency       Pension     Comprehensive
                                    Translation     Adjustment       Income  
                                    -----------     ----------   -------------                                         

         Balance December 31, 1997      $(790)         $ (20)          $(810)
         Change in period                  24              -              24
                                        -----          -----           -----
         Balance March 31, 1998         $(766)         $ (20)          $(786)
                                        =====          =====           =====


         Balance December 31, 1998      $(826)         $ (47)        $  (873)
         Change in period                (136)             -            (136)
                                        -----          -----         -------
         Balance March 31, 1999         $(962)         $ (47)        $(1,009)
                                        =====          =====         =======
(/TABLE>


See Accompanying Notes to Consolidated Financial Statements.


<PAGE>
                                     PAGE 6
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   COMPUTATION OF NET INCOME PER COMMON SHARE
                      (Millions, except per share amounts)
                                   (Unaudited)
<CAPTION>

                                             Three Months Ended
                                                  March 31             
                                             ------------------                      
                                                1999      1998
                                                ----      ----
<S>                                           <C>       <C>
Net Income, as reported .............         $  269    $  268
Less:  Preferred stock dividends ....              1         1
                                              ------    ------
Net Income, basic ...................         $  268    $  267
Effect of dilutive securities:
    Convertible preferred stock .....              1         1
                                              ------    ------
Net Income, assuming full dilution ..         $  269    $  268
                                              ======    ======


Common shares, basic ................          1,107     1,122
Effect of dilutive securities:
    Convertible preferred stock .....             12        12
    Stock options ...................             13        18
                                              ------    ------
Common shares, assuming full dilution          1,132     1,152
                                              ======    ======

Net Income per Common Share
  Basic .............................         $  .24    $  .24
                                              ======    ======

  Assuming full dilution ............         $  .24    $  .23
                                              ======    ======
</TABLE>


See Acccompanying Notes to Consolidated Financial Statements.

<PAGE>
                                     PAGE 7
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounting Comments
-------------------
Reference is made to the registrant's 1998 annual report to stockholders,  which
contains,  at pages 24 through 40,  financial  statements and the notes thereto,
which are  incorporated by reference in the  registrant's  Annual Report on Form
10-K for the year ended December 31, 1998.

For interim reporting purposes,  advertising  expenses are charged to operations
as a  percentage  of sales,  based on  estimated  sales and related  advertising
expense for the full year. On an annual basis,  advertising costs are expensed
in the year incurred.

Effective  January 1, 1999,  Gillette  operations  in Mexico have  ceased  using
hyperinflationary  accounting. The functional currency in Mexico is the Peso and
the  switch  to  non-hyperinflationary  accounting  had no  material  impact  on
reported results.

The Company assesses the  recoverability of goodwill by determining  whether the
amortization  of the goodwill  balance over its remaining  life can be recovered
through  undiscounted future operating cash flows of the acquired operation.  If
the  goodwill  amortization  cannot be fully  recovered,  the amount of goodwill
impairment is determined  based on projected  discounted  future  operating cash
flows or appraised values, depending on the nature of the asset.

With respect to the financial  information for the interim  periods  included in
this report, which is unaudited, the management of the Company believes that all
adjustments  necessary for a fair  presentation  of the results for such interim
periods have been included.

Accounting Pronouncements
-------------------------
In June  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  133,
"Accounting for Derivative Instruments and Hedging Activities." The Company will
adopt SFAS 133 no later than  January  1, 2000.  Its impact on the  consolidated
financial  statements  is still being  evaluated,  but it is not  expected to be
material.




<PAGE>
                                     PAGE 8
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reorganization and Realignment
------------------------------

On September 28, 1998, the Company announced a reorganization that would realign
its worldwide operations. In connection with the reorganization and realignment,
and in accordance with EITF issue 94-3 and SFAS 121, the Company recorded in the
third  quarter of 1998 a charge to  operating  expenses  of $535  million  ($347
million  after taxes,  or $.30 in net income per common share,  fully  diluted).
Employee  severance  and  related  benefits,  shown  below,  includes  severance
payments,  fringe benefits,  outplacement fees and special termination  benefits
related to pensions.

Details of the reorganization and realignment charges follow.

                                    Activity    Current    Activity
                        Initial      Through    Quarter     Through
(Millions of dollars)  Provision   Dec.31,1998  Activity  Mar.31,1999  Balance
---------------------  ---------   -----------  --------  -----------  -------
Employee severance and
  related benefits        $385       $ 51         $ 19      $ 70        $315
Asset impairments          135        135            -       135           -
Distributor buyout costs    15          3            7        10           5
                          ----       ----         ----      ----         ---  
Total                     $535       $189         $ 26      $215        $320
                          ====       ====         ====      ====         ===
  
The effect of suspending  depreciation  for impaired assets in the first quarter
was $3 million.

Share Repurchase Program
------------------------
On  September  18, 1997,  the  Company's  Board of Directors  authorized a share
repurchase  program to purchase up to 50 million shares in the open market or in
privately  negotiated  transactions,  depending on market  conditions  and other
factors. The Company did not repurchase any shares in the first quarter of 1999.
From  the  inception  of  the  program  through  March  31,  1999,  the  Company
repurchased 22 million shares in the open market for $1,119 million.

In 1999,  the Company  continued to sell equity put options as an enhancement to
its ongoing  share  repurchase  program and collected $16 million in premiums in
the  first  quarter.  These  options  provide  the  Company  with an  additional
opportunity  to  supplement  open-market  purchases  of its common  stock if the
options  expire "in the money"  (the  option  strike  price is greater  than the
closing price for Gillette  common stock on the expiration  date).  In addition,
the premiums  received are a source of funding for share purchases.  The options
are  exercisable  only on the last day of their  term.  The Company may elect to
settle by paying net cash or by purchasing  the shares.  To date the Company has
always  purchased  shares upon settlement and it is the intention of the Company
to continue this practice.

The option prices were based on the market value of the  Company's  stock at the
date of  issuance.  The  redemption  value  of the  outstanding  options,  which
represents the options'  price  multiplied by the number of shares under option,
is presented  in the  accompanying  consolidated  balance  sheet as  "Contingent
Redemption  Value of Common Stock Put  Options."  At March 31, 1999,  no "in the
money" obligations existed on outstanding options.
<PAGE>
                                     PAGE 9
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Financial Information by Business Segment
-----------------------------------------
Net  sales,  profit  from  operations  and  identifiable  assets for each of the
Company's  business  segments  are  set  forth  below.  There  are  no  material
intersegment revenues.

                                         Net Sales  
                                         ---------                    
                                    Three Months Ended
                                         March  31
                                    -------------------                   
(Millions of dollars)                 1999        1998                       
                                     ------      ------
 Blades & Razors                    $  652      $  584
 Toiletries                            225         306
 Stationery Products                   143         166
 Braun Products                        298         343
 Oral-B Products                       145         144
 Duracell Products                     476         482
                                     ------      ------
   Total                            $1,939      $2,025
                                     ======      ======


                                  Profit from Operations
                                  ----------------------
                                    Three Months Ended
                                         March  31      
                                    ------------------                    
 (Millions of dollars)                 1999       1998 
                                      ------     ------
 Blades & Razors                     $  266     $  243
 Toiletries                              30         23
 Stationery Products                      1         13
 Braun Products                          38         39
 Oral-B Products                         23         19
 Duracell Products                       92         98
                                      ------     ------
 Sub-total Reportable Segments          450        435
 All Other                               (3)        (1)
                                      ------     ------
   Total                             $  447     $  434
                                      ======     ======

<PAGE>

                                     PAGE 10
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                          Identifiable Assets
                                 ----------------------------------------
                                 Mar 31,    Dec 31,    Mar 31,    Dec 31,
(Millions of dollars)             1999       1998       1998       1997   
                                 -------    -------    -------    -------
Blades & Razors                 $ 3,347    $ 3,378    $ 3,009    $ 3,006
Toiletries                          747        771        861      1,004
Stationery Products               1,211      1,330      1,269      1,299
Braun Products                    1,574      1,679      1,397      1,544
Oral-B Products                     725        680        602        622
Duracell Products                 3,014      3,288      2,926      3,138
                                 ------     ------     ------     ------
Sub-total Reportable Segments    10,618     11,126     10,064     10,613
All Other                           841        776        628        251
                                 ------     ------     ------     ------
  Total                         $11,459    $11,902    $10,692    $10,864
                                 ======     ======     ======     ======


<PAGE>
                                     PAGE 11
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Results of Operations
---------------------
Results  for  any  interim  period,  such  as that  described  in the  following
analysis, are not necessarily indicative of the results for the entire year.

First Quarter 1999 versus 1998
------------------------------
Sales for the quarter ended March 31, 1999, were $1.94 billion, a decrease of 4%
versus the same  quarter of the prior year.  Excluding  the  adverse  effects of
exchange  and  the  divestitures  of  Jafra  Cosmetics   International  and  the
rechargeable battery business, sales rose 3%.

Sales in North America were  considerably  above those of the prior year, due to
successful  new product  launches,  including the Mach3 shaving  system,  Oral-B
CrossAction  toothbrush and Duracell Ultra battery.  Sales in Latin America were
significantly  below those of the prior year,  reflecting the negative effect of
Brazil's  recessionary  environment on both volume and exchange rates.  Sales in
Asia-Pacific  were appreciably above those of the prior year, due to the success
of the Mach3  launch in  Australia  and  Japan,  as well as  improvement  of the
battery  market in South Korea.  Sales in Western Europe were  marginally  below
those of the previous year, as considerable  gains in blades and razors,  driven
by the Mach3  system,  were offset by softness in  stationery  products  and the
impact of Germany's weak economy on Braun sales.  Sales in AMEE (Africa,  Middle
East and Eastern Europe) were  substantially  below those of the prior year, due
to unfavorable exchange and the poor Russian economy.

Sales and profits of blade and razor  products were notably higher than those of
the prior year, buoyed by sales of the Mach3 system.  Sales and profits in North
America,   three  full  quarters  after  the  initial  launch  of  Mach3,   were
substantially above those of the prior year, a pattern that is being repeated in
markets  around the world.  Driven by the June 1998 launch of the Mach3  shaving
system,  Gillette  blade  dollar  share  in the  United  States  has  grown  3.5
percentage  points,  from 66.9% in March 1998 to 70.4% in March 1999. In Western
Europe,  where the Mach3 system was launched in September  1998,  and sales grew
considerably,  Gillette blade dollar share  increased 2.4  percentage  points to
73.2 percent, from Jan/Feb 1998 to Jan/Feb 1999.

Sales of Duracell  products  were about the same as those of the prior year,  as
strength  in the United  States and some  recovery in South Korea were offset by
weakness in Latin  America and AMEE,  and by the negative  impact of exiting the
rechargeable  battery business.  The total alkaline battery dollar market in the
United States grew by 13% from March 1998 to March 1999, with the Duracell share
of that rapidly  expanding  market  growing from 48.6% in March 1998 to 50.2% in
March 1999.  Duracell profits declined from those of the prior year,  reflecting
marketing expenses behind the geographic rollout of Ultra batteries.

Braun sales were significantly below those of 1998, due to poor Christmas retail
offtake in the United  States and softness in Western  Europe and AMEE.  Profits
were  only  marginally   below  those  of  1998,  the  result  of  manufacturing
efficiencies, cost containment and reduced marketing expenses.

Toiletries  sales were  markedly  below those of the prior year,  due in part to
unmatched  Jafra sales since the  divestiture of the business on April 30, 1998.
Excluding  Jafra,  toiletries  sales were  appreciably  below those of the prior
year,  as good growth in North America was  overshadowed  by much lower sales in
AMEE markets.  Profits were sharply higher,  due to unmatched new product launch
expenses in 1998.
<PAGE>
                                     PAGE 12
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Sales and profits of stationery products were substantially below those of 1998.
Sales were  affected by weakness in Parker pen sales in all  regions,  while the
sharp drop in profits was due to fewer sales dollars to cover fixed costs.

Sales of Oral-B products in the first quarter showed little change from those of
the prior year, as strong  growth in North  America,  driven by the  CrossAction
toothbrush,  was  offset by much  lower  sales in Latin  America.  Profits  were
significantly higher than those of the previous year, aided by favorable product
mix.

Costs and  Expenses
-------------------
Gross profit was $1.25 billion, virtually unchanged from 1998. Gross profit as a
percentage  of sales  was  64.3%,  compared  with  61.3%  in 1998.  Margin
improvement is due to improved  sales mix from increased  sales of higher margin
blade and razor  products,  plus the  introduction of higher margin new products
for Duracell and Oral-B.

Selling,  general and administrative  expenses  decreased by $9 million,  or 1%.
Combined  advertising and sales promotion expenses increased 6% versus the prior
year.  Spending on research and development  decreased 2%, while other marketing
and administrative expenses decreased 5%.

Profit from operations was $447 million, up 3% from $434 million a year earlier.

Net interest expense was higher,  due to increased  borrowings to fund the share
repurchase  program.  Net  exchange  losses were also higher,  primarily  due to
conditions in Turkey. The effective tax rate was lower.

Net income of $269  million was  virtually  unchanged  from the $268  million in
1998.  Diluted  net income  per common  share of $.24 was 4% above the $.23 of a
year earlier.

Reorganization and Realignment
------------------------------
On September 28, 1998, the Company  announced a  reorganization  and realignment
program that  resulted in a  third-quarter  charge to operations of $535 million
($347  million  after  taxes,  or $.30 in net  income per  common  share,  fully
diluted).

The program will result in the closure of 14  factories,  12  warehouses  and 30
office  facilities,  as well as a reduction  of  approximately  4,700  employees
across all  business  segments,  geographies  and employee  groups.  Pretax cash
outlays were $16 million in 1998 and are estimated at approximately $180 million
in 1999 and $160 million in 2000. Cash severance payments will extend beyond the
completion of program activities, due to the severance payment options available
to affected employees.  In 1999, cash expenditures from the program are expected
to be greater than the cash benefits generated. Cash requirements will be funded
from  operations.  When fully  implemented  in 2000,  the program will  generate
pretax savings of approximately $200 million annually.
<PAGE>
                                     PAGE 13
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Employee  reductions through March 31, 1999, totaled 846 employees.  Progress to
date  has  met  expectations,   and  the  pace  of  realignment   activities  is
accelerating.  In  1999,  approximately  40% of the  annual  benefit  should  be
achieved,  with the majority of the estimated  annual savings  realized in 2000,
when the program is completed.

Additional  reorganization and realignment  details are provided in the Notes to
Consolidated Financial Statements.

Financial Condition
-------------------
Net cash provided by operating  activities  for the three months ended March 31,
1999,  amounted to $321  million,  compared with $182 million in the same period
last year.  A  significant  portion of this  change is due to the funding of the
German pension plan in 1998. Other working capital items compared unfavorably to
1998 due to the timing of tax payments.

At March 31, 1999,  receivables were  significantly  below the year-end balance,
while inventories  increased  markedly,  typical movements in the first quarter.
Net debt (Loans  Payable,  Current portion of long-term debt and Long-Term debt,
net of  associated  swaps,  less Cash and cash  equivalents)  at March 31, 1999,
amounted to $2.89  billion,  compared with $3.18 billion at year-end  1998.  The
decrease in net debt was primarily due to the  availability  of cash provided by
operating  activities.  The Company's current ratio at March 31, 1999, was 1.81,
compared  with 1.56 at December 31, 1998,  reflecting  the impact of lower loans
payable.

On February 2, 1999,  the Company  issued a $343 million Euro  denominated  debt
obligation due February 2004. On March 26, 1999, the Company entered into a $325
million  Euro  denominated  debt  obligation  which  expires in March 2002.  The
proceeds were used to reduce  commercial paper borrowing and for other Corporate
purposes. Based on the Company's intention and ability to maintain its revolving
credit  agreements  beyond 1999, $500 million of commercial  paper borrowing was
classified  as long-term  debt at March 31, 1999.  At December 31, 1998,  $1,100
million of commercial paper borrowing was classified as long-term debt.

Year 2000
---------
The Company has  undertaken a  comprehensive  approach to address its  potential
exposure  to the Year 2000  issue -  covering  all  potentially  affected  areas
(applications,   computers,  facilities,   manufacturing  equipment,  suppliers,
customers, etc.) at all locations.

At March 31, 1999,  93% of the affected  items  identified  were certified to be
Year 2000 compliant, or their risks have been minimized to an appropriate level.
The Company expects to make substantial  progress on the remaining items by June
30, 1999.  The remaining  tasks have been  identified  and are well  understood.
Resources have been assigned, and the work is under way.
<PAGE>
                                     PAGE 14
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Gillette has established  180 separate  contact points around the world to track
the year 2000 progress of each of the Company's 180 facilities or organizations.
In the discovery  phase of the Year 2000 effort,  potentially  affected items at
all 180 locations were identified.  Of the 25,000 total items identified,  7,800
were internal  Information  Technology (IT) and non-IT items  classified as high
impact. Of those 7,800 high impact items,  only 3% are not yet compliant.  There
are four  information  technology  system  replacement  projects  under way,  in
individual foreign countries,  which will result in Year 2000 compliance for all
remaining  items that are  considered  significant.  These four  projects are in
phase  five  (phase  six  is  Year  2000  certified  compliance).  Three  of the
replacements are scheduled for completion in June through August 1999.The fourth
system replacement, which in one country supports half of our business activity,
is scheduled for completion in October 1999. Although this project supports only
a portion of our  business in a single  country,  with  minimal  business  risk,
contingency  plans are being  developed  for this  system and will be enacted if
required.

The  Company  has  material  third-party  relationships  with  suppliers  of raw
materials,  and with customers and utility providers.  Raw materials are readily
available and most can be supplied by a number of alternate vendors.

We purchase raw materials  externally  and generally  have strong  relationships
with our vendors,  for whom we are a significant source of revenue. For large or
important  vendors,  we have  asked for  confirmation  of their  compliance  and
verification  that  their  program  also  extends  to the  compliance  of  their
suppliers.  Where  initial  responses  were  questionable,  we have  engaged  in
dialogue and followed up with on-site visits where  appropriate.  For those very
few who remain  questionable,  we  continue  to  monitor  them  closely.  If not
confident  of their  compliance,  we will invoke  contingency  plans as and when
necessary.

For our largest  customers (those  cumulatively  representing 75% of sales for a
country), we have informed them of our progress and inquired of theirs, focusing
on their  ability  to order,  receive  and pay for our  products.  We are in the
process of testing  electronic  interfaces with all  significant  North American
customers. In addition, some local operations have mailed informational packages
to all  customers  and/or  hosted  conferences  to raise  awareness,  share  our
progress and assess our customers' efforts.

The Company has an extensive quality  assurance program in place,  including the
RAP 2000 program (rapid assessment program) carried out by external consultants,
designed to ensure that Year 2000 activities are accomplishing their objectives.
In  addition,  the Company has  reviewed  independent  external  assessments  of
infrastructure risk in foreign countries.

The  Company  continues  to  develop  detailed  contingency  plans to deal  with
unexpected  issues,  which may occur.  These plans include the identification of
appropriate resources and response teams. Individual business managers worldwide
are responsible to ensure their business functions continue to operate normally.
We have established  Company-wide  minimum  requirements for contingency  plans,
which are under  development.  While the specifics vary by country,  the general
strategies include:  increasing the on-hand supply of raw materials and finished
goods;  identifying  alternate  suppliers  of raw  materials;  employing  backup
generators;  ensuring key personnel (both business and technical) are physically
on-site;  backing up critical  systems  just before  year-end;  and  identifying
alternative methods of doing business with customers as necessary.
<PAGE>
                                     PAGE 15
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

We are also in the process of establishing  contingency  teams at each operating
location that will be empowered to address any internal or third-party  failures
by approving  temporary changes in our business  processes and policies,  should
this be necessary to ensure business continuity.

In addition, Gillette operations depend on infrastructures in over 200 countries
and territories in which the Company operates and,  therefore,  a failure of any
one of those  infrastructures  could materially adversely affect its operations.
Our most significant foreign markets, based on net sales and manufacturing, are,
in alphabetical order, Belgium,  Brazil, Canada, France, Germany, Italy, Mexico,
and the United Kingdom. In these countries,  we are not aware of any significant
weaknesses  in their  infrastructures.  Independent  external  consultants  have
reinforced our conclusions.

Despite this comprehensive  approach, the Company cannot be completely sure that
issues  will not arise,  nor events  occur,  that  could have  material  adverse
effects  on  the  Company's  results  of  operations  or  financial   condition.
Nevertheless,  Gillette does not expect a material  failure.  The Company's Year
2000 program is designed to minimize the  likelihood  of any failure  occurring.
The most reasonably likely worst-case  scenario is that a short-term  disruption
will  occur  with a  small  number  of  customers  or  suppliers,  requiring  an
appropriate response.

Spending for the program is  budgeted,  expensed as incurred and not expected to
be material.

<PAGE>
                                     PAGE 16
                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

The  Company is  subject,  from time to time,  to legal  proceedings  and claims
arising out of its  business,  which  cover a wide range of  matters,  including
antitrust  and trade  regulation,  advertising,  product  liability,  contracts,
environmental issues, patent and trademark matters and taxes. Management,  after
review and consultation  with counsel,  considers that any liability from all of
these legal  proceedings and claims would not materially affect the consolidated
financial position, results of operations or liquidity of the Company.


Item 4.  Vote of Security Holders

At its Annual  Meeting  on April 15,  1999,  the  stockholders  of The  Gillette
Company took the following actions:

1.     Elected  the  following  four  directors  for terms to expire at the 2002
       Annual  Meeting of  Stockholders,  with votes as indicated  opposite each
       director's name:

                                            For              Withheld
                                        -----------         ----------
         Warren E. Buffett              945,682,707          9,717,203
         Michael B. Gifford             945,500,205          9,899,705
         Carol R. Goldberg              945,182,731         10,217,179
         Marjorie M. Yang               945,347,881         10,052,029

2.     Approved  the  appointment  by the Board of Directors of KPMG as auditors
       for the year 1999. The vote was 949,806,941 for and 2,044,875 against the
       proposal, with 3,548,094 abstentions.

3.     Rejected a stockholder proposal calling for the Company's  endorsement of
       the CERES principles on the environment. The vote was 660,554,966 against
       and  53,965,835  for  the  proposal  with   65,140,499   abstentions  and
       175,738,610 broker nonvotes.


<PAGE>
                                     PAGE 17
           
           


Item 5.  Other Information

Cautionary Statement
--------------------
From time to time, the Company may make statements  which  constitute or contain
"forward-looking"  information as that term is defined within the meaning of the
Federal   securities   laws.   These   statements  may  be  identified  by  such
forward-looking words  as  "expect,"  "look,"  "believe,"  "anticipate,"  "may,"
"will,"  and  variations  of these words or other  forward-looking  terminology.
Forward-looking  statements  made by the  Company are not  guarantees  of future
performance.   Actual   results  may  differ   materially   from  those  in  the
forward-looking  statements as the result of risks and  uncertainties  including
those  listed   below.   The  Company   assumes  no  obligation  to  update  any
forward-looking information.

    * the pattern of the Company's sales,  including  variations in sales volume
      within periods,  which makes  forward-looking  statements  about sales and
      earnings difficult and may result in variance of actual results from those
      contained in statements made at any time prior to the period's close;

    * vigorous  competition  within the  Company's  product  markets,  including
      pricing  and  promotional  advertising  or  other  activities  in order to
      preserve or gain market  share,  the timing of which cannot be foreseen by
      the Company;

    * the Company's reliance on the development of new products and the inherent
      risks associated with new product introductions,  including uncertainty of
      trade and customer acceptance and competitive reaction;

    * the  costs   and  effects  of   unanticipated   legal  and  administrative
      proceedings;

    * the  impacts  of unusual  items  resulting  from  ongoing  evaluations  of
      business strategies, asset valuations and organizational structure;

    * a substantial  portion of the Company's sales having been made outside the
      United States, making forecasting of sales more difficult;

    * the impact on sales or earnings of fluctuations in  exchange rates in one 
      or more of the Company's foreign markets;

    * the  impact of the year 2000  issue on the  Company's  order,  production,
      distribution  and financial  systems  and  the  systems of its suppliers, 
      customers and utility providers;

    * the  possibility of one or more of the global markets in which the Company
      competes  being  impacted by variations  in  political,  economic or other
      factors,  such as inflation rates,  recessionary or expansive trends,  tax
      changes, legal and regulatory changes or other external factors over which
      the Company has no control;

  <PAGE>


                                     PAGE 18
           



    * the   effects  of  rapid  technological  change  on   product  development
      differentiation, acceptance and  costs including technological advances of
      competitors;

    * the  effects  of  patents  including   possible  new  patents  granted  to
      competitors  or challenges to Company  patents and  expiration of patents,
      which affect competition and product acceptance.


Item 6(a)  Exhibits

Exhibit 27 Financial Data Schedule


Item 6(b)  Reports on Form 8-K

The Company filed a current  report on Form 8-K dated  February 19, 1999,  which
referred to an  announcement  by the Company on the  previous day of the planned
retirement  of  Alfred M.  Zeien,  Chairman  of the  Board  and Chief  Executive
Officer,  and the  election  of Michael C.  Hawley as  Chairman of the Board and
Chief Executive Officer.



<PAGE>
                                     PAGE 19
                                    SIGNATURE






SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

         THE GILLETTE COMPANY
             (Registrant)






CHARLES W. CRAMB

Charles W. Cramb
Senior Vice President, Finance,
Chief Financial Officer and
Principal Accounting Officer
May 14, 1999