Alcon Shares Tumble After Slashing Sales Outlook
Eye care giant's stock falls over 8% as it cites tariff headwinds and a soft surgical market, overshadowing a major acquisition.
Shares of Alcon Inc. plunged more than 8% on Wednesday after the Swiss-American eye care giant cut its full-year sales forecast, citing the growing impact of tariffs and soft market conditions. The lowered outlook spooked investors, overshadowing a beat on quarterly earnings and the announcement of a significant strategic acquisition.
The company announced late Tuesday that it was lowering its 2025 sales guidance to a range of $10.3 billion to $10.4 billion, down from a previous forecast of $10.4 billion to $10.5 billion. Alcon attributed the revision to an anticipated $100 million gross impact from tariffs, an increase from its earlier estimate of $80 million, alongside market softness, particularly in its surgical division.
The news sent the company’s stock tumbling, as it overshadowed results for the second quarter. Alcon reported sales of $2.58 billion, a 4% year-over-year increase but still missing analyst consensus estimates of $2.63 billion. However, its adjusted earnings per share of 76 cents beat the 72-cent consensus.
The market weakness was most apparent in the company's Surgical segment, where net sales grew a modest 2% to $1.5 billion. Within that unit, sales of implantables declined by 2%, which the company linked to competitive pressures and soft market conditions. In contrast, the Vision Care segment saw net sales rise 6% to $1.1 billion, driven by strong performance in contact lenses.
The pessimistic forecast also overshadowed Alcon's major strategic move to acquire STAAR Surgical in an all-cash deal valued at approximately $1.5 billion. The acquisition is intended to bolster Alcon's position in the growing market for myopia correction through STAAR's implantable collamer lenses.
"Alcon is exiting the second quarter with solid momentum, despite a relatively soft surgical market in the first half of the year," said David J. Endicott, Alcon’s Chief Executive Officer. He noted that robust early demand for recent product launches has been encouraging and positions the company to accelerate top-line growth in the long term.
Despite the CEO's optimism, the immediate focus for investors remained on the near-term headwinds. While affirming its full-year adjusted earnings guidance, Alcon lowered its core operating margin outlook, signaling that profitability pressures would accompany the sales slowdown.