Monday, August 14, 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.
Third Quarter Results. RCI reported revenue of $77.1 million, up 9% y-o-y and in-line with our $77.8 million estimate. Net income was $9.1 million, or EPS of $0.96 compared to $13.9 million, or $1.48, last year with 3Q23 results impacted by higher expenses and one-time costs. Adjusted EPS was $1.30 versus $1.60. Adjusted EBITDA was at $22.7 million versus $24.6 million last year. We estimated net income of $12.9 million, EPS of $1.34, and adjusted EBITDA of $24.9 million.
Tough Comps and a Tough Environment. We would note 3Q22 had one of the highest levels of operating leverage in the last five years, as the business benefitted from the COVID emergence, directly impacting y-o-y comparisons. A continued uncertain economic environment also impacted results to a degree.
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