RCI Hospitality Holdings Reports Revenue Decline and Increased Profitability in Q2 2025

RCI Hospitality Holdings, Inc. reported its financial results for the second quarter and six months ended March 31, 2025, revealing a decline in total revenues and profitability compared to the same periods in the previous year. Total revenues for the second quarter were $65.9 million, down 8.9% from $72.3 million in the prior year, while year-to-date revenues decreased by 6.0% to $137.4 million from $146.2 million. The company's net income for the second quarter was $3.2 million, or $0.36 per share, compared to $749,000, or $0.08 per share, in the same quarter last year. For the six-month period, net income rose to $12.3 million from $8.0 million, reflecting a significant increase in profitability.

The decline in revenue was attributed to several factors, including the impact of closed locations and a decrease in same-store sales, particularly in the Bombshells segment, which saw a 35.6% drop in revenue. Nightclubs revenue also fell by 3.1%. The company noted that closed locations accounted for a $4.5 million revenue loss in the second quarter, while same-store sales contributed an additional $3.1 million decline. Despite these challenges, the company experienced a $681,000 revenue increase from newly acquired clubs and a $326,000 boost from reopened clubs that were rebranded.

In terms of operational developments, RCI Hospitality Holdings completed the acquisition of a club in Detroit, Michigan, for $11 million in January 2025, and another club in West Columbia, South Carolina, for $8 million in April 2025. The company also sold a Bombshells location in Austin, Texas, for $70 million, recognizing a gain of $1.3 million. As of March 31, 2025, the company operated a total of 67 establishments, with plans for further geographic expansion and diversification of its operations.

The company reported a decrease in cash flows from operating activities, which totaled $21.9 million for the six months ended March 31, 2025, down from $24.5 million in the prior year. This decline was primarily due to lower revenue conversion to cash, despite a higher net income. RCI Hospitality Holdings also indicated that it has been self-insuring a significant portion of its general liability and liquor insurance programs, which may lead to volatility in future payments for expected losses. Looking ahead, the company expects to generate adequate cash flows from operations over the next 12 months, while continuing to monitor macroeconomic conditions that could impact its financial performance.