Shares of brewhouse restaurant chain BJ's Restaurants (BJRI -2.12%) popped almost 9% to end the week after reporting financial results for the third quarter of 2023. This one is a bit of a head-scratcher, considering financial results missed expectations and analysts lowered price targets. The stock was even down as much as 5% early in the session before jumping to as much as a 10% gain.

A lackluster quarter for BJ's

In Q3, BJ's generated total revenues of $318.6 million, which was up 2.3% year over year. Not only was the growth modest, it was lower than Wall Street's expectations. On the bottom line, the company had a net loss of $3.8 million, which was worse than its net loss in the prior-year period. 

Multiple analysts lowered their price targets for BJ's Restaurants stock in light of its performance in Q3. For example, Citi analyst Jon Tower had previously recommended holding the stock and gave it a price target of $29 per share. Tower still recommends holding but lowered his price target to $28 per share, according to StreetInsider.

Many of the price-target reductions were modest, like Tower's. Wall Street's response could have been worse. And perhaps it consoled investors that the response was so soft.

Could there be better days ahead?

BJ's is known for having a pretty expansive menu, but management is narrowing its focus. The company said it just reduced its menu size by 15%, which could help it become more efficient. And the early response from diners has been positive. 

BJ's also plans to open four to six new locations in 2024, which is modest growth. That said, the company is changing its design to save $1 million per location in construction costs. And with the new layout, management believes it can cut labor expenses due to efficiency gains. 

Therefore, perhaps the market is looking past lackluster Q3 results and modest growth prospects, anticipating a meaningful rebound in profitability for BJ's Restaurants in 2024.

BJ's Restaurants will make an investor-day presentation on Nov. 14, further laying out its long-term vision.