Shares of food manufacturer Beyond Meat (BYND 0.95%) jumped as much as 15.7% in trading on Thursday after reporting third-quarter 2023 financial results. Shares gave back some of their gains, but are still up 7.9% at 1:20 p.m. ET.
Beyond Meat's third-quarter results
Revenue was up 8.7% to $75.3 million, and the company reported a gross loss of $7.3 million, or 9.6% of sales. Net loss was down from $101.7 million a year ago to $70.5 million, or $1.09 per share.
Results missed analyst estimates of $87.9 million in revenue and a loss of $0.85 per share.
The outlook wasn't much better, with sales expected to fall 19% to 21% in 2023 to $330 to $340 million.
Why the stock is up
Beyond Meat announced 65 jobs would be eliminated, leading to savings of $9.5 million to $10.5 million in operating cost savings in 2024. That's a big reason the stock was up, and the market sees cost savings as a positive step for Beyond Meat.
The problem is, cutting nonproduction costs won't help the company financially. About $0.10 is lost on every $1 of sales of Beyond Meat products, so no amount of operating cost cuts are going to make up for that.
I think this is a bounce that investors will look back on as hype overcoming reality. Beyond Meat's business is shrinking, losses are piling up, and the dwindling number of customers who buy its products aren't paying enough to pay the bills. That's a bad combination for the business long term.
