RCI Hospitality Holdings Reports $16.3M Net Income, Revenue Decline in Nine-Month Period

RCI Hospitality Holdings, Inc. reported its financial results for the nine months ending June 30, 2025, revealing a net income of $16.3 million, a significant increase from $2.8 million in the same period last year. Total revenues for the nine-month period were $208.5 million, down 6.2% from $222.4 million in the prior year, primarily due to a decline in sales from its Bombshells restaurant segment, which saw revenues drop by 31.6%. The company’s earnings per share rose to $1.84 from $0.30 year-over-year, reflecting improved profitability despite lower overall revenues.

In terms of operational performance, RCI Hospitality experienced a decrease in same-store sales of 2.5% for the nine-month period, with nightclubs reporting a 1.3% decline and Bombshells a more pronounced 11.5% drop. The company attributed the revenue decline to the impact of closed locations and a decrease in customer engagement, particularly in the Bombshells segment, which faced challenges from increased competition and changing consumer preferences. The total number of establishments operated by RCI remained stable at 70, with ongoing efforts to enhance customer experience and operational efficiency.

Strategically, RCI Hospitality has been active in acquisitions, completing the purchase of a club in Detroit for $11 million and another in West Columbia, South Carolina, for $8 million during the reporting period. These acquisitions are part of the company's growth strategy to expand its footprint in key markets. Additionally, the company sold a Bombshells location in Austin, Texas, for $70 million, which contributed to a gain of $1.3 million. The company continues to explore opportunities for further acquisitions while managing its existing portfolio.

Financially, RCI's cash flow from operating activities was $35.7 million, down from $40.2 million in the previous year, reflecting lower cash generation from revenues. The company reported a net cash decrease of $2.8 million, ending the period with $29.6 million in cash and cash equivalents. RCI's total debt as of June 30, 2025, was approximately $241.3 million, a slight decrease from $245.4 million at the end of the previous fiscal year. The company has indicated that it expects to generate sufficient cash flows to meet its operational needs over the next year.

Looking ahead, RCI Hospitality Holdings remains focused on enhancing its operational performance and expanding its market presence through strategic acquisitions and improved customer engagement. The company is also addressing internal control weaknesses identified in previous evaluations, aiming to strengthen its financial reporting processes. Management is optimistic about the potential for growth and profitability in the coming quarters, despite the challenges posed by market conditions and competition.