STAAR Surgical Company (STAAR Surgical (STAA)) is having a rough Friday, with shares sliding in premarket trading after the company released preliminary second-quarter numbers that were strong — but not strong enough to shake off geopolitical worries.
The contact lens maker said it expects net sales for the quarter ending July 3, 2026, to come in above $90 million. That's more than double the $44.3 million it reported in the same period last year. The jump is largely thanks to a rebound in China and solid momentum in the Americas, even as macroeconomic and geopolitical challenges linger in some overseas markets.
China's Inventory Reset Is Paying Off
The quarterly performance was heavily influenced by sequential growth in China, along with healthy gains across the broader Asia-Pacific region. The Americas also delivered a double-digit percentage sales increase, showing that the core business is humming along nicely.
The massive year-over-year growth is largely tied to normalized operations in China. During the second quarter of 2025, STAAR deliberately limited shipments of its EVO Implantable Collamer Lenses to the country, letting local distributors clear out excess stock. By the end of this recent quarter, distributor inventories had returned to the company's optimal target range to serve the refractive market properly.
So, the China story is back on track — at least for now.
Middle East Conflict Casts a Shadow Over EMEA
Not all regions are celebrating. The Europe, Middle East, and Africa (EMEA) segment saw a low single-digit percentage decline, directly attributed to the ongoing conflict in the Middle East. Strip out the Middle East, though, and the rest of EMEA posted double-digit percentage growth — a sign that the underlying business across that region is resilient.
Still, management is keeping a close eye on things. Significant geopolitical and macroeconomic obstacles continue to weigh on sales in the Middle East, as well as specific areas within EMEA and Asia-Pacific. The company warned that if these headwinds intensify or spread to other global markets, future revenue growth could take a hit.
"While geopolitical and macroeconomic pressures continue to present headwinds in certain markets, and while our ERP system implementation presented meaningful operational challenges during the quarter, our team again rose to the occasion and delivered strong results," said Warren Foust, Co-CEO, President and Chief Operating Officer. "We remain focused on resolving the remaining system issues in the third quarter and are confident in the continued momentum of our business."
Value vs. Momentum: A Tale of Two Scores
The verdict? STAAR has a growth-heavy profile with strong momentum, which could mean more upside if the company executes well. But the low value score is a red flag for anyone looking for a bargain entry point.
Stock Reaction
Investors seemed to focus on the risks rather than the revenue beat. STAAR shares were down 8.49% at $26.52 in premarket trading on Friday, according to market data. The market may be pricing in the geopolitical uncertainty, or perhaps the strong preliminary numbers weren't enough to justify the stock's recent run-up.
Either way, STAAR's story is one of two halves: a booming China recovery and Americas growth on one side, and Middle East turmoil and valuation concerns on the other. For now, the cautious side seems to be winning the day.
