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1. Company Snapshot

1.a. Company Description

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States.The company operates through Nightclubs, Bombshells, and Other segments.It owns and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club.


The company also operates restaurants and sports bars under the Bombshells Restaurant & Bar brand, as well as a dance club under the Studio 80 brand.In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites.Further, RCI Hospitality Holdings, Inc.


holds license to sell Robust Energy Drink in the United States.The company was formerly known as Rick's Cabaret International, Inc.and changed its name to RCI Hospitality Holdings, Inc.


in August 2014.RCI Hospitality Holdings, Inc.was founded in 1983 and is based in Houston, Texas.

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1.b. Last Insights on RICK

The recent 3 months performance of RCI Hospitality Holdings, Inc. was negatively impacted by dismal sales in its Bombshells and Nightclubs segment, as reported in its Q2 business update. This decline in top-line revenue was a significant concern, despite the company's efforts to optimize its Bombshells portfolio and direct free cash flow towards growing its nightclub footprint. Additionally, the acquisition of Platinum West Gentlemen's Club in West Columbia, SC, while a positive development, did not seem to offset the negative impact of the segment's poor sales.

1.c. Company Highlights

2. RCI Hospitality Holdings' Q3 2025 Earnings: A Mixed Bag

RCI Hospitality Holdings reported total revenues of $71.1 million for the third quarter of 2025, a decline of $5 million year-over-year due to the sale of underperforming Bombshells locations. Net income attributable to RCIHH common shareholders was $4.1 million, up $9.3 million year-over-year, while adjusted EBITDA was $15.3 million, down $4.8 million year-over-year. The company's EPS came in at $0.46, missing estimates of $1.24. The Nightclubs segment revenue was $62.3 million, down less than 1% year-over-year, while Bombshells revenue was $8.6 million, down $4.5 million year-over-year.

Publication Date: Aug -26

📋 Highlights
  • Revenue Decline with Improved Net Income:: Total revenues fell to $71.1 million (-6.8% YoY), but net income surged to $4.1 million (+220% YoY) due to absence of impairment charges.
  • EBITDA Drop Driven by Bombshells:: Adjusted EBITDA slipped to $15.3 million (-23.8% YoY), with Bombshells revenue declining $4.5 million (-34% YoY) from asset sales.
  • Cash Position and Low Debt:: Ended Q3 with $29.3 million cash and $201,000 debt, yielding a 3.82x debt-to-EBITDA ratio, reflecting strong liquidity.
  • Real Estate Sales Potential:: Up to $65–$75 million in real estate could be sold, with $40 million potential gain over book value, targeting debt reduction and M&A.
  • Free Cash Flow Growth Target:: Aims for 10–15% annual free cash flow per share growth through club acquisitions, buybacks, and operational efficiency.

Segment Performance

The Nightclubs segment continued to perform well, with revenue declining less than 1% year-over-year despite economic uncertainty. The Bombshells segment, on the other hand, saw a significant decline in revenue due to the sale of underperforming locations. The company's consolidated profitability benefited from the absence of impairment charges.

Capital Allocation Strategy

RCI Hospitality Holdings is focused on its capital allocation strategy, which includes club acquisitions, share buybacks, debt reduction, and dividends. The company aims to grow free cash flow per share annually at a 10% to 15% rate. With a strong free cash flow yield of 15.83%, the company has the flexibility to execute on its capital allocation plan.

Valuation

Using the Price-to-Sales ratio of 1.16 and EV/EBITDA of 8.11, we can assess the company's valuation. The current valuation multiples suggest that the market is pricing in moderate growth expectations. With the company's focus on capital allocation and growing free cash flow, there is potential for upside if the company can execute on its plan.

Outlook

The company's management is optimistic about the future, citing the potential for new money to drive growth in the clubs. With a strong cash position and low debt, the company is well-positioned to take advantage of opportunities. As Eric Langan noted, "We're expecting a bonus as new money starts moving into things." The company's focus on divesting underperforming assets and acquiring new clubs in more competitive markets is also expected to drive growth.

3. NewsRoom

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RCI Announces 40th Consecutive Quarterly Cash Dividend

Dec -04

Source: businesswire.com

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RCI Hospitality's CEO, CFO Resign After Buying Back Shares From This Democratic Senator's Son At 50% Premium — Amid Tax Fraud, Bribery Scandals, More

Dec -01

Source: feeds.benzinga.com

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RCI Board of Directors Names Reese as Interim President and CEO and Molina as Interim CFO

Nov -28

Source: businesswire.com

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RCI Acquires 821,000 Shares from ADW Capital Partners, L.P.

Nov -21

Source: businesswire.com

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Contrasting RCI Hospitality (NASDAQ:RICK) and Atour Lifestyle (NASDAQ:ATAT)

Nov -21

Source: defenseworld.net

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RICK Investors Have Opportunity to Lead RCI Hospitality Holdings, Inc. Securities Fraud Lawsuit with the Schall Law Firm

Nov -21

Source: prnewswire.com

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Levi & Korsinsky Announces the Filing of a Securities Class Action on Behalf of RCI Hospitality Holdings, Inc. (RICK) Shareholders

Nov -20

Source: globenewswire.com

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DEADLINE ALERT for RICK, FTNT, and MOH: The Law Offices of Frank R. Cruz Reminds Shareholders of Securities Fraud Class Actions

Nov -20

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Nightclubs

Expected Growth: 3%

RCI Hospitality Holdings, Inc.'s Nightclubs segment growth is driven by increasing demand for premium entertainment experiences, strategic acquisitions, and effective marketing strategies. Additionally, the company's focus on providing high-quality service, unique events, and loyalty programs contribute to customer retention and attract new patrons, resulting in sustained revenue growth.

Bombshells

Expected Growth: 3%

RCI Hospitality Holdings' 3% growth is driven by increasing demand for entertainment and leisure activities, expansion of its nightclub and restaurant business, and strategic acquisitions. Additionally, the company's focus on enhancing customer experience, improving operational efficiency, and investing in digital marketing initiatives have contributed to its growth momentum.

Other

Expected Growth: 3%

RCI Hospitality Holdings' 3% growth is driven by increasing demand for entertainment and leisure activities, expansion of its nightclub and restaurant business, and strategic acquisitions. Additionally, the company's focus on enhancing customer experience through technology upgrades and loyalty programs contributes to its growth.

7. Detailed Products

Nightclubs

RCI Hospitality Holdings, Inc. operates a chain of nightclubs that offer live adult entertainment, featuring exotic dancers and other performers.

Restaurants

The company owns and operates restaurants that serve a variety of cuisines, including American, Italian, and Mexican, often located near its nightclubs.

Bars

RCI Hospitality Holdings, Inc. operates bars that offer a range of beverages and snacks, often featuring live music or sports events.

Bikinis Sports Bar and Grill

A sports-themed restaurant and bar chain that offers a casual dining experience, featuring burgers, wings, and other American classics.

Bombshells Restaurant and Bar

A military-themed restaurant and bar chain that offers a casual dining experience, featuring American classics and a wide selection of beers.

8. RCI Hospitality Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for RCI Hospitality Holdings, Inc. is medium due to the presence of alternative forms of entertainment and leisure activities. While the company's clubs and restaurants offer a unique experience, customers may choose to substitute with other forms of entertainment, such as movies, concerts, or sporting events.

Bargaining Power Of Customers

The bargaining power of customers for RCI Hospitality Holdings, Inc. is low due to the company's strong brand recognition and loyal customer base. Customers have limited bargaining power to negotiate prices or demand customized services.

Bargaining Power Of Suppliers

The bargaining power of suppliers for RCI Hospitality Holdings, Inc. is medium due to the company's dependence on a few key suppliers for food, beverages, and other essential items. While suppliers have some bargaining power, the company's scale and negotiating power mitigate this risk.

Threat Of New Entrants

The threat of new entrants for RCI Hospitality Holdings, Inc. is low due to the high barriers to entry in the adult entertainment and hospitality industry. New entrants would need significant capital and expertise to establish a competitive presence.

Intensity Of Rivalry

The intensity of rivalry for RCI Hospitality Holdings, Inc. is high due to the competitive nature of the adult entertainment and hospitality industry. The company faces intense competition from established players and new entrants, which can lead to pricing pressure and marketing wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 49.67%
Debt Cost 7.08%
Equity Weight 50.33%
Equity Cost 12.38%
WACC 9.75%
Leverage 98.69%

11. Quality Control: RCI Hospitality Holdings, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
RAVE

A-Score: 5.3/10

Value: 5.0

Growth: 6.0

Quality: 8.8

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

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Cannae Holdings

A-Score: 4.7/10

Value: 8.4

Growth: 1.6

Quality: 3.8

Yield: 3.0

Momentum: 4.0

Volatility: 7.7

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Stock-Card
RCI Hospitality

A-Score: 4.3/10

Value: 7.6

Growth: 5.1

Quality: 5.2

Yield: 1.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
First Watch

A-Score: 4.2/10

Value: 4.7

Growth: 8.2

Quality: 2.2

Yield: 0.0

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Chuy's

A-Score: 3.6/10

Value: 4.1

Growth: 6.8

Quality: 3.9

Yield: 0.0

Momentum: 5.0

Volatility: 2.0

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Stock-Card
Denny's

A-Score: 3.5/10

Value: 8.5

Growth: 2.9

Quality: 4.3

Yield: 0.0

Momentum: 2.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.17$

Current Price

26.17$

Potential

-0.00%

Expected Cash-Flows