RCI Hospitality Holdings, Inc. Quarterly Report on Form 10-Q

Press release · 05/10 11:57
RCI Hospitality Holdings, Inc. Quarterly Report on Form 10-Q

RCI Hospitality Holdings, Inc. Quarterly Report on Form 10-Q

RCI Hospitality Holdings, Inc. has filed a quarterly report on Form 10-Q, highlighting its financial condition and results of operations. The company has 9,325,117 shares of common stock outstanding and is subject to various risks and uncertainties, including those related to the adult entertainment business, competition, and the COVID-19 pandemic. The company is cautious about relying on forward-looking statements due to these risks and uncertainties.

Financial Performance

RCI Hospitality Holdings Inc. owns and operates adult nightclubs and sports bar/restaurants. For the six-month period ended March 31, 2024:

  • Total revenues were $146.2 million, up 3.3% from $141.5 million in the same period last year
    • Nightclubs revenues were $120.4 million, up 6.2%
    • Bombshells restaurants revenues were $25.5 million, down 8.1%
  • Same-store sales decreased 9.2% overall
    • Nightclubs same-store sales decreased 6.5%
    • Bombshells same-store sales decreased 20.4%

Profitability

  • Net income was $8 million compared to $18 million in the same period last year
  • Earnings per share were $0.85 compared to $1.94 in the same period last year

The decline in profitability was primarily due to lower same-store sales and higher operating expenses.

Revenue Performance

The table below shows the company’s revenues by type:

Revenue Type 6 Months Ended 3/31/2024 6 Months Ended 3/31/2023 Change
Alcohol Sales $66.2 million $59.8 million +10.8%
Food & Merchandise Sales $21.9 million $21.4 million +2.4%
Service Revenues $48.7 million $51.3 million -5.0%
Other Revenues $9.4 million $9.1 million +3.5%
Total Revenues $146.2 million $141.5 million +3.3%

Alcohol sales grew due to newly acquired nightclubs, while service revenues declined due to lower same-store sales.

Expenses

Operating expenses were 87.8% of revenues compared to 78.6% last year. The increase was driven by:

  • Higher cost of goods sold due to sales mix changes
  • Increased salaries and wages from new locations and wage inflation
  • Higher insurance costs
  • Increased taxes and permits

Profit Outlook

Declines in same-store sales have impacted profitability over the past six months. The company expects same-store sales to improve as pandemic impacts fade. New club acquisitions and Bombshells locations will also contribute to profit growth.

Management is focused on boosting performance at underperforming locations. The company’s strong cash flows enable new investments and acquisitions to drive growth.