What happened
Shares of STAAR Surgical (NASDAQ: STAA) were down 9.6% on Thursday, according to data provided by S&P Global Market Intelligence, after announcing mixed quarterly results relative to Wall Street's expectations and lowering its near-term outlook.
To be sure, the implantable lens specialist saw net sales climb 14% year over year to $92.3 million in the second quarter -- slightly below estimates for sales of $93 million. On the bottom line, that translated to an adjusted net income of $19.7 million, or $0.40 per share (down from $0.42 per share a year earlier), handily exceeding estimates for earnings of $0.32 per share.
So what
STAAR Surgical's revenue growth was driven entirely by 19% growth (20% at constant currency) in sales of its Implantable Collamer Lens (ICL) products to $93.1 million, offset partially by a $0.7 million sales reduction related to a sales return reserve of some intraocular lens (IOL) products. It seems revenuewould have been roughly in line with expectations had it not been for that adjustment.
STAAR Surgical CEO Tom Frinzi noted that the peak implant season for their EVO ICL lenses in China "had a strong start in June" while the products continue to enjoy a "strong market position and long runway for growth" in the Asia-Pacific region. In the U.S. market, however, Fritz added that while ICL growth has "exceeded industry trends," it's been below company expectations to date. The company is also remaining cautious, Fritz added, "given increased conservatism related to the global environment."
Now what
As such, STAAR Surgical now expects fiscal 2023 ICL sales of $320 million to $325 million, or 20% year-over-year growth -- a reduction from previous guidance for 28% global ICL sales growth this year.
To be clear, this doesn't mean STAAR Surgical is a broken business. On the contrary, it's still a fast-growing company with a compelling product portfolio, attractive unit economics, and a long runway for growth. But given this mixed quarterly and forward guidance reduction amid macro concerns in the near term, it's hardly surprising to see shares pulling back today.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends STAAR Surgical. The Motley Fool has a disclosure policy.
