STAAR Surgical (NASDAQ: STAA) shares tumbled 7.41% in after-hours trading on Wednesday following the release of its disappointing first-quarter 2025 financial results. The eye care company reported a significant earnings miss and a steep decline in revenue, prompting investor concern about its near-term prospects.

The company posted a quarterly loss of $0.64 per share, falling short of analyst expectations of a $0.59 loss. This represents a substantial deterioration from the $0.07 per share loss reported in the same period last year. STAAR Surgical's net sales plummeted 45% year-over-year to $42.59 million, primarily due to a planned reduction of channel inventory in China. Despite beating the analyst consensus estimate of $40.30 million, the dramatic revenue decline raised eyebrows among investors.

Adding to the concerns, STAAR Surgical reported a net loss of $54.2 million for the quarter, compared to a $3.3 million loss in the prior-year period. The company's gross margin also contracted significantly, dropping to 65.8% from 78.9% a year ago. In response to these challenges, management announced cost control measures and restructuring initiatives, primarily focused on U.S. operations, to reduce its SG&A run rate. Despite the current setbacks, STAAR Surgical expressed confidence in resuming growth in revenue and adjusted EBITDA for the second half of the year, which may provide some comfort to long-term investors.