What happened

Shares of The Beauty Health Company (SKIN -7.60%) were up more than 25% as of 12:25 p.m. on Tuesday after the cosmetics company announced a business reorganization and a stock repurchase plan and reiterated yearly guidance. The stock is down more than 43% so far this year.

So what

Beauty Health focuses on skin health products. Its lead product is Hydrafacial, a patented skin treatment that has microdermabrasion qualities. On Tuesday, the company said that it expected to see more than $20 million in cost savings from a reorganization plan. The company also reiterated that it expects to have between $600 million and $700 million in revenue in 2025, along with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of between 25% to 30% by 2025.

The company said its reorganization will come in two steps, the first designed to find $20 million in annualized cost saving during the first quarter of 2024 by streamlining the company's product offerings, modernizing processes, and using initiatives to increase manufacturing efficiencies. The second phase is designed to find $15 million in annualized cost savings during the second quarter of 2024 by improving manufacturing operations. 

The company added that it doesn't plan any large mergers or acquisitions during its reorganization. 

Beauty Health's board also approved the repurchase of up to $100 million of company stock beginning in the third quarter. 

Now what

Investors were encouraged by the announcement of the changes, which comes a day after the stock hit a yearly low of $5.43 a share. In the second quarter, reported in August, Beauty Health said it had quarterly revenue of $117.5 million, a rise of 13% year over year, and net income of $3.4 million, compared to $6.3 million in the same period a year ago.