RCI Hospitality Holdings Reports $4.6 Million Net Loss and Revenue Decline for December 2025 Quarter

RCI Hospitality Holdings, Inc. reported a net loss of $4.6 million for the three months ended December 31, 2025, a significant decline from a net income of $9.1 million during the same period in 2024. This resulted in a loss per share of $0.57, compared to earnings of $1.01 per share in the prior year. Total revenues for the quarter were $70.8 million, a decrease of 0.9% from $71.5 million in the previous year. The decline in revenue was attributed to a $1.4 million impact from closed locations, partially offset by a $4.8 million increase from new locations. Consolidated same-store sales decreased by 7.7%, with nightclubs down 5.8% and Bombshells restaurants down 21.9%.

Operating expenses increased to $59.8 million, up from $57.6 million in the prior year, primarily due to higher salaries and wages, which rose by 4.3% to $21.4 million. The company's operating margin fell to 15.6% from 19.5% year-over-year. The increase in operating expenses as a percentage of revenues was driven by a combination of factors, including a rise in depreciation and amortization expenses, which increased by 17.3% due to additional assets from club acquisitions. The company also recorded an impairment of assets totaling $1.2 million during the quarter.

In terms of strategic developments, RCI Hospitality Holdings engaged in significant stock repurchase activities, purchasing 821,000 shares for $30 million in November 2025, financed through a combination of cash and a two-year unsecured promissory note. The company also sold a club subsidiary in Harlingen, Texas, for $600,000, recognizing a loss of approximately $17,000 on the sale. As of December 31, 2025, the company operated 68 establishments, including adult nightclubs and Bombshells restaurants, with plans to evaluate its Bombshells program in light of recent performance trends.

Looking ahead, RCI Hospitality Holdings aims to generate adequate cash flows from operations over the next 12 months, despite facing challenges such as negative working capital of $26.3 million. The company has expressed confidence in its ability to manage cash flows and is focused on its five-year Back-to-Basics strategy, which emphasizes improving the performance of existing clubs and restaurants. The company anticipates continued organic growth and potential acquisitions, although it acknowledges the need for additional financing to support its growth strategy.