Wednesday, April 12, 2023
With more than 60 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, Scarlett’s Cabaret, Diamond Cabaret, and PT’s Showclub. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.
Joe Gomes, Managing Director – Generalist Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2Q23 Preliminary Revenues. RCI reported preliminary 2Q23 revenue for the Nightclubs and Bombshells. Total revenues of $70.8 million were up 12.3% year-over-year. Y-o-Y SSS were up 0.2%. Nightclubs revenue of $56.6 million was up 18.6% y-o-y and 3.7% on a SSS basis, while Bombshells revenue of $14.3 million was off 7.1% y-o-y and down 12.1% on a SSS basis. We had estimated full 2Q23 revenue at $71 million.
Organic, Acquisitions Drive Nightclubs. Revenue from clubs owned prior to FY22 increased 2.1% y-o-y. The 11 clubs acquired in October 2021 were up 19.5% y-o-y, a testament to the implementation of the RCI operating playbook. The six clubs acquired since the beginning of FY23 added $1.8 million, while the three remodeled/renamed clubs contributed $1.2 million. RCI continued to see intermittent softness in select blue collar clubs during the quarter, with several clubs also impacted by adverse weather conditions.
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