RCI Hospitality Q1 2025 Earnings Report
Key Takeaways
RCI Hospitality reported its Q1 2025 results, with Nightclubs total and same-store sales increasing. Bombshells total sales declined due to the sale/closure of underperforming locations, but GAAP and non-GAAP segment operating profit and margin improved. Consolidated net cash provided by operating activities and free cash flow nearly matched year-ago levels.
Nightclubs total and same-store sales increased.
Bombshells total sales declined as expected with the sale/closure of underperforming locations, but GAAP and non-GAAP segment operating profit and margin improved.
Consolidated net cash provided by operating activities and free cash flow nearly matched year-ago levels.
Continued to make progress with Back to Basics 5-Year Capital Allocation Plan.
RCI Hospitality
RCI Hospitality
Forward Guidance
RCI Hospitality Holdings is focused on executing its Back to Basics 5-Year Capital Allocation Plan, including strategic acquisitions and optimizing its existing portfolio. They anticipate continued growth in key segments while managing expenses and leveraging opportunities for improved profitability.
Positive Outlook
- Sale/closure of four underperforming Bombshells segment locations in 1Q25.
- Repurchased 66,000 common shares for $3.2 million in 1Q25.
- Acquired Flight Club in Detroit market, expected to generate $2.0 million in annualized EBITDA in 2Q25.
- Opened an 8,500 square-foot Bombshells in downtown Denver in 2Q25.
- Weighted average shares outstanding decreased 4.8% due to share buybacks.
Challenges Ahead
- Bombshells total sales declined due to the sale/closure of underperforming locations.
- The absence of Baby Dolls Fort Worth due to fire in July impacted Nightclubs segment revenues.
- Corporate segment expenses increased due to an expense of approximately $1.7 million to establish a self-insurance reserve.
- Service revenues in Nightclubs segment declined by 3.7%.
- Weighted average shares used in computing EPS – basic and diluted decreased.