Staar Surgical Company ((STAA)) has held its Q4 earnings call. Read on for the main highlights of the call.
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STAAR Surgical Company’s recent earnings call reflects a mixed sentiment, with notable achievements being overshadowed by significant challenges in the Chinese market. While the company is experiencing substantial growth in markets outside of China, the decline in Chinese sales has negatively impacted overall results. Despite these difficulties, STAAR remains hopeful for a recovery in China and is cautiously optimistic about future growth prospects, particularly in the U.S. market. However, the current headwinds have led to a reserved outlook for fiscal 2025.
Strong Growth Outside of China
STAAR Surgical reported impressive growth outside of China, with $152 million in ICL sales, marking a 17% increase in Q4 and a 13% rise for fiscal year 2024. This growth highlights the company’s successful expansion efforts and strong market presence in regions outside of China.
U.S. Market Share Gains
In the United States, STAAR achieved a significant sales growth of 22% in Q4 and 15% for the fiscal year. This performance is particularly noteworthy as it outstrips the broader market trend, which experienced a decline in laser vision correction procedures, showcasing STAAR’s competitive edge and increasing market share.
Diverse Global Presence
STAAR Surgical’s business boasts a geographically diverse footprint, with operations in over 75 countries. The company has shown strong performance in regions such as EMEA and APAC, excluding China, underscoring its robust global presence and ability to adapt to various market conditions.
Significant Decline in China Sales
The earnings call revealed a substantial decline in ICL sales in China, with figures dropping to $7.5 million in Q4 and $161 million for the full year, a 13% decrease year-over-year. This downturn is attributed to weakened consumer confidence and an economic slowdown, posing considerable challenges to STAAR’s operations in the region.
Unrecognized Revenue Due to Extended Payment Terms
A noteworthy issue impacting fiscal 2024 results was the unrecognized revenue from a $27.5 million order shipped to China in December, due to extended payment terms. This situation has contributed to the financial challenges the company faces in China.
Fiscal Year Decline in Sales
STAAR Surgical’s total net sales for fiscal 2024 stood at $313.9 million, reflecting a 3% decline compared to the previous year. This downturn is primarily linked to the challenges faced in the Chinese market, overshadowing the growth experienced in other regions.
Net Loss for Fiscal 2024
The company reported a net loss of $20.2 million for fiscal 2024, contrasting with a net income of $21.3 million from the previous year. This reversal is largely due to the adverse conditions in the Chinese market and the aforementioned unrecognized revenue.
Challenges with Inventory in China
STAAR Surgical is grappling with elevated inventory levels in China, which are expected to lead to minimal ICL sales during the first half of 2025. This situation further complicates the company’s efforts to stabilize and grow in the Chinese market.
Guidance for Fiscal 2025
STAAR Surgical’s guidance for fiscal 2025 reflects cautious optimism. The company expects ICL sales outside China to grow between 9% and 15%, amounting to $165 million to $175 million. In contrast, the outlook for China is less certain, with sales projected between $75 million and $125 million, considering potential market fluctuations. Despite these challenges, the company remains hopeful about its performance in other regions and is focused on navigating the volatile economic conditions, particularly in China.
In summary, STAAR Surgical’s earnings call reflects a challenging year marked by significant obstacles in China, which have impacted overall financial performance. However, the company’s strong growth in other regions and market share gains in the U.S. provide a silver lining. Looking forward, STAAR remains cautiously optimistic about overcoming current challenges and achieving continued growth, particularly as it navigates the complexities of the Chinese market.
