STAAR Surgical Reports 45% Revenue Decline and $54.2 Million Net Loss in Q1 2025

STAAR Surgical Company reported a significant decline in financial performance for the first quarter of 2025, with net sales of $42.6 million, a decrease of 45% compared to $77.4 million in the same period of 2024. The drop in revenue was primarily attributed to a substantial reduction in sales to distributors in China, which fell to $0.4 million from $38.5 million year-over-year. This decline was influenced by excess inventory held by distributors due to lower-than-expected procedural volumes in the previous year, leading to minimal new purchases in the current quarter.

The company's gross profit also saw a sharp decline, falling 54.1% to $28.0 million, resulting in a gross margin of 65.8%, down from 78.9% in the prior year. This decrease was largely due to higher manufacturing costs per unit stemming from lower production volumes and increased inventory reserves. Additionally, STAAR Surgical incurred restructuring and impairment charges totaling $22.7 million, which included severance costs and impairments on fixed assets and software as part of a leadership realignment aimed at reducing costs and positioning the company for sustainable growth.

Operationally, STAAR Surgical's total current assets decreased to $326.5 million from $367.9 million at the end of 2024, while current liabilities also saw a slight reduction to $68.4 million. The company reported a net loss of $54.2 million for the quarter, compared to a loss of $3.3 million in the same period last year, resulting in a net loss per share of $1.10. The total stockholders' equity decreased to $350.0 million from $397.3 million, reflecting the impact of the net loss and restructuring charges.

In terms of strategic developments, STAAR Surgical is focusing on mitigating risks associated with tariffs imposed by the U.S. and China by implementing consignment agreements with distributors in China. This strategy aims to reduce financial exposure and ensure a steady supply of implantable Collamer lenses (ICLs) in the market. The company is also ramping up production capabilities in Switzerland to support its manufacturing needs amid evolving trade conditions.

Looking ahead, STAAR Surgical anticipates that sales in China will normalize as distributor inventory levels decrease. The company expects to report improved revenue in the latter half of fiscal 2025, contingent on macroeconomic conditions and the successful execution of its strategic initiatives. However, the ongoing challenges in the Chinese market and potential tariff impacts remain critical factors that could influence future performance.