On Tuesday, Staar Surgical Company (NASDAQ:STAA) reported a fourth-quarter 2024 EPS loss of 69 cents, a turnaround from an income of 16 cents, missing the consensus loss of 16 cents.

The contact lens maker reported sales of $48.95 million, compared to $76.3 million in the prior year quarter, missing the consensus of $77.3 million.

The decrease was due to a significant decline in China revenue, driven by worsening trends in overall refractive procedure volumes.

Implantable Collamer Lens (ICL) sales were $46.9 million for the fourth quarter of 2024 compared to $74.6 million in the prior year quarter.

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Excluding China, ICL sales were $39.5 million, an increase of 17%.

In December 2024, the company shipped $27.5 million of ICLs to China, for which it did not recognize revenue due to extended payment terms with its distributor.

The company determined to keep product in-country before the anticipated demand rebound in the second half of 2025 and mitigate potential impacts from geopolitical and tariff changes.

Based on the extended payment terms, Staar Surgical expects to receive full payment and fully recognize this revenue by the end of the fiscal quarter ending September 26, 2025.

The gross profit margin for the fourth quarter of 2024 was 64.7% compared to 79.6% a year ago.

Guidance: Staar Surgical expects 2025 ICL sales Ex. China of approximately $165 million to $175 million, representing approximately 9% to 15% growth, assuming overall refractive procedure volumes in the Americas will be down 5%-10%; EMEA will be flat; and APAC Ex. China will be flat.

China’s ICL sales will be less than $5 million for the first half of 2025, as the company works through elevated inventory levels against weak demand for refractive in-market procedures.

The company sees China ICL sales of approximately $75 million-$125 million in the second half of 2025, which is dependent on overall refractive procedure volumes in China, which the company believes could be down 10% at the low end.

The high end of this range contemplates a rebound in overall refractive procedure volumes growing 10%.

In fiscal year 2025, the company says it will manage its working capital and implement appropriate cost-cutting measures in light of the lower revenue forecast.

The company intends to lower production output, decrease capital expenditures, and make targeted reductions to operating expenses, which will impact headcount and discretionary spending.

Based on the company's outlook for fiscal year 2025, Staar Surgical no longer expects to achieve its Vision 2026 Target Sales and Operating Model, initially announced in September 2023.

William Blair downgraded Staar Surgical to a Market Perform rating given the lack of visibility, uncertainty around stimulus to date, and increasing competition in the region amid what appears to be another year of global refractive market contraction in 2025.

Price Action: Staar Surgical stock is down 38.6% at $13.44 during the premarket session on last check Wednesday.

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