Shares of Beyond Meat (BYND -2.25%) were moving higher today after the company reported preliminary third-quarter earnings, announced layoffs and further cost cuts, and lowered its full-year revenue guidance.

While the numbers were worse than prior expectations, the stock still jumped on the news, trading up 16.2% as of 1:22 p.m. ET.

Person shopping in the freezer section of the supermarket.

Image source: Getty Images.

Investors cheer the cost-cutting plan

Beyond Meat said that revenue for the third quarter was expected to be approximately $75 million, representing a decline of 9% and worse than estimates at $87.9 million. It also forecast a negative gross profit of $7 million to $8 million, showing the business continues to look structurally broken.

Nonetheless, the company still expects positive free cash flow in the quarter of $7.6 million due to efforts to reduce cash consumption, but it expects negative cash flow in Q4.

What seemed to give the stock a boost was a new cost-cutting plan, including a 19% reduction in its corporate workforce, a review of its pricing strategy to boost gross margin, and other changes designed to improve the business.

More trouble ahead

For the full year, the company lowered its revenue forecast to $330 million-$340 million, a decline of 19%-21% with break-even gross profit.

At this point, the stock has fallen so far that investors are eager to grab on to any news that could signal a potential turnaround, but the challenges facing the company are starting to seem insurmountable.

The economics of the business seem fundamentally flawed if it can't generate a gross profit, and Beyond Meat is operating in a highly competitive industry, where it has no pricing power. Therefore, it's going to take more than a cost-cutting plan to save the business at this point.