Procter & Gamble (P&G) announced on Tuesday that it expects to record charges amounting to $2 billion to $2.5 billion across fiscal years 2024 and 2025. The charges will primarily include a non-cash impairment charge before tax of $1.3 billion in the current quarter, related to the company's Gillette business. As a result of this news, P&G's shares experienced a decline of approximately 2% during early trading.

P&G, known as a consumer goods giant, acquired Gillette in 2005 for $57 billion. Currently, the grooming business contributes around 8% of P&G's total sales. Chief Financial Officer, Andre Schulten, stated at a Morgan Stanley conference that the company expects Gillette's growth to remain consistent at approximately 5%, aligning with its performance over the past three years.

However, challenges stemming from difficult macroeconomic conditions in Argentina and Nigeria have prompted P&G to undertake a restructuring process. The company anticipates charges between $1 billion and $1.5 billion after tax for the revamp of its operations in these two countries. P&G attributes these charges partly to the impact of a stronger US dollar.

Schulten expressed the company's frustration, stating, "It's very difficult for us as a U.S. dollar-denominated company to create value in these markets." In response to the market conditions, P&G has decided to divest its fabric and home care business in Argentina and transition Nigeria into an import-only market.

These charges are not the first setback for P&G's Gillette business. In 2019, the company incurred an $8 billion charge due to currency fluctuations. As such, the decision to write down the value of the Gillette business and implement strategic changes in problematic markets demonstrates P&G's commitment to address financial challenges and adapt to evolving circumstances.

The total charges of $2 billion to $2.5 billion after tax are anticipated to support P&G's ongoing restructuring efforts and address the impact of unfavorable economic environments. The charges will be recognized across fiscal years 2024 and 2025.

For fiscal year 2023, P&G reported net earnings of $14.7 billion attributable to the company.

As P&G continues its strategic initiatives, investors will closely monitor the company's performance and its ability to navigate challenges in order to sustain growth and enhance shareholder value.