Wednesday, October 11, 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, Equity Research Analyst, Generalist , 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.
4Q23 Club and Restaurant Sales. RCI reported sales for the Nightclubs and Bombshells restaurants of $74.1 million for the fiscal fourth quarter ended September 30th. This is a 5.6% y-o-y increase, driven by acquisitions which was partially offset by a decline in Same Store Sales across both segments. We had projected full revenue for the quarter of $78.3 million and consensus was $78.1 million. Recall the $74.1 million does not include non-core operations, which typically can add some $0.5-$1.0 million to the final quarterly total.
Nightclubs. Revenue rose 7.5%, y-o-y, or $4.2 million, to $60.5 million, with acquisitions adding $9.2 million and reformatted clubs adding $0.8 million. Segment SSS declined 9.6%, an increase over the 7.3% SSS decline in 3Q23. Part of the SSS decline reflects the last “COVID bounce” the Nightclubs experienced in the year ago quarter when y-o-y revenue rose 40.4%.
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