Key Highlights

  • Net sales were USD 83.41 million against a USD 78.73 million estimate, with EPS of USD 0.11 against USD 0.05.
  • Prior-year third quarter net sales were USD 94.7 million, including USD 25.9 million from the December China Shipment.
  • Gross Margin was 70.9% against 82.2% a year earlier, with management citing costs, freight, tariffs and inventory provisions.
  • Cash and investments were USD 206.4 million, and the board authorized repurchases of up to USD 50.0 million.

STAAR Surgical Company (NASDAQ:STAA) described its priorities around its Implantable Collamer Lenses, which account for almost all of its worldwide revenue. Management said it is working to make the complete ICL line available in existing markets, enter new ones, raise awareness of the procedure and train surgeons, while investing in research, clinical proof and regulatory progress for products beyond the core lens.

Operations, Manufacturing and the ERP Rollout

All new ICLs for China were manufactured in Switzerland starting in the third quarter of 2026. The company said tariffs on U.S. goods produced for China continue to affect margin until it can Supply all EVO and EVO+ICL lenses for China from Swiss inventory. Per unit manufacturing costs were also higher because of low second quarter production volumes during the rollout of a new enterprise resource planning system.

The company described the ERP implementation as a significant undertaking in which unforeseen operational challenges required extensive daily manual intervention. It said it met its sales targets for the quarter, that some implementation issues persist, and that a remediation plan targets resolving the most significant issues by the end of 2026.

Regionally, Asia Pacific sales decreased 20% because the prior-year period included the China shipment, Europe, Middle East and Africa sales increased 31%, and the Americas rose 14%. In Japan, sales decreased 8%, which management attributed to currency.

Financial Results for the Fiscal Third Quarter

Net sales for the quarter ended October 2, 2026 were USD 83.4 million, a 12.0% decrease from USD 94.7 million. Management said that excluding the USD 25.9 million December China Shipment, the prior-year base would have been USD 68.8 million, against which net sales would have increased 21%.

Gross profit was USD 59.1 million against USD 77.9 million, and gross margin was 70.9% against 82.2%. Excluding the China shipment, the company stated third quarter 2025 gross margin would have been 75.5%.

Net income was USD 5.6 million, or USD 0.11 per diluted share, against USD 8.9 million, or USD 0.18. The company said the prior-year quarter benefited from the China shipment, tax effected at USD 15.2 million, and that excluding it the prior-year result would have been a net loss of USD 6.3 million, or USD 0.13 per diluted share.

Cash, Buyback and Margin Targets

Cash and investments available for sale rose to USD 206.4 million at October 2, from USD 181.5 million at July 3. Cash and cash equivalents were USD 133.6 million and investments were USD 72.8 million. Operating Cash Flow for nine months was USD 25.3 million against an outflow of USD 30.3 million a year earlier.

In September 2026 the board authorized repurchases of up to USD 50.0 million of common stock, and none were repurchased in the quarter.

The company provided no numerical Revenue or Earnings guidance. On margin, management said it does not project reaching its 75% gross margin target in 2026, while projecting improvement in the fourth quarter as production volumes rise in the U.S. and Switzerland, freight costs fall after ERP enhancements and Tariff costs decline.

Guidance Versus Reported Results

Net sales of USD 83.41 million sit alongside gross margin of 70.9%, a 75% gross margin target not projected for 2026, and cash and investments of USD 206.4 million.

Management named its stated priorities: resolving the most significant ERP issues by the end of 2026, shifting China supply to Swiss production, reducing expiring inventory and continuing to invest in systems. It also pointed to the USD 50.0 million repurchase authorization, under which no shares have yet been bought.