RCI Hospitality (NASDAQ:RICK) Issues Earnings Results, Misses Expectations By $2.44 EPS

RCI Hospitality (NASDAQ:RICK) released its quarterly earnings results on Thursday. The restaurant operator reported ($0.63) earnings per share (EPS) for the quarter, missing the consensus estimate of $1.81 by ($2.44), Zacks reports. RCI Hospitality had a return on equity of 6.19% and a net margin of 5.88%.The firm had revenue of $70.93 million for the quarter, compared to analysts’ expectations of $69.80 million.

Here are the key takeaways from RCI Hospitality’s conference call:

• Management booked a legal reserve of about $9M, which drove GAAP corporate expenses up and contributed to a quarterly net loss of $5.5M and a drop in adjusted EBITDA to $7.4M (from $17.9M) and non-GAAP EPS swinging to a loss.
• Cash flow remained strong (quarterly free cash flow ~$13.1M; cash & equivalents $33.7M) and the company has aggressively repurchased shares, reducing outstanding share count to ~7.7 million (≈14% lower since 9/30/24).
• The core nightclub segment was largely stable with revenues up 0.4% to $60.9M and segment operating income improving to $16.3M (margin 26.8%), with several standout clubs noted by management.
• Bombshells revenues declined to $9.4M reflecting fewer locations, but management is prioritizing profitability over sales—reformatting, divesting underperformers and targeting a 15% operating margin with an eventual sale when market conditions improve.
• The company reiterated its five‑year capital allocation plan (targeting >$250M total free cash flow and ~ $75M annual FCF by FY2029) and says it will continue prioritizing buybacks, debt reduction and selective acquisitions to boost free cash flow per share.

RCI Hospitality Trading Down 0.7%

NASDAQ:RICK opened at $21.71 on Friday. The firm has a market capitalization of $189.31 million, a P/E ratio of 18.09 and a beta of 0.82. The business has a 50 day simple moving average of $23.47 and a 200 day simple moving average of $25.69. The company has a debt-to-equity ratio of 0.83, a current ratio of 0.92 and a quick ratio of 0.83. RCI Hospitality has a 12-month low of $20.76 and a 12-month high of $47.03.

RCI Hospitality Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, March 31st. Investors of record on Monday, March 16th will be issued a $0.08 dividend. This is a positive change from RCI Hospitality’s previous quarterly dividend of $0.07. The ex-dividend date of this dividend is Monday, March 16th. This represents a $0.32 annualized dividend and a dividend yield of 1.5%. RCI Hospitality’s dividend payout ratio (DPR) is 26.67%.

Hedge Funds Weigh In On RCI Hospitality

Hedge funds and other institutional investors have recently modified their holdings of the company. BNP Paribas Financial Markets grew its position in shares of RCI Hospitality by 62.0% during the second quarter. BNP Paribas Financial Markets now owns 847 shares of the restaurant operator’s stock worth $32,000 after acquiring an additional 324 shares during the last quarter. State of Alaska Department of Revenue acquired a new position in RCI Hospitality during the 4th quarter valued at about $54,000. CWM LLC boosted its stake in RCI Hospitality by 1,256.9% during the 3rd quarter. CWM LLC now owns 1,954 shares of the restaurant operator’s stock valued at $60,000 after purchasing an additional 1,810 shares during the period. State of Wyoming bought a new position in RCI Hospitality in the 4th quarter worth about $67,000. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. bought a new position in RCI Hospitality in the 3rd quarter worth about $115,000. Institutional investors and hedge funds own 53.82% of the company’s stock.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings reaffirmed a “sell (d)” rating on shares of RCI Hospitality in a research report on Monday, December 29th. One research analyst has rated the stock with a Buy rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus price target of $98.00.

About RCI Hospitality

RCI Hospitality Holdings, Inc operates as a diversified hospitality and entertainment company focused on the ownership and operation of adult nightclubs and themed sports bars throughout the United States and select international markets. The company’s U.S. Nightclub segment includes venues branded as Rick’s Cabaret, Club Onyx and various other upscale adult entertainment clubs, offering private dance experiences, VIP services and live performances. Its Restaurant & Bar segment operates Bombshells, a brunch-themed sports bar chain featuring chef-driven menus, craft cocktails and game-day viewing in a military-inspired setting.

In addition to its brick-and-mortar venues, RCI Hospitality deploys proprietary digital platforms for talent recruitment, training and scheduling, helping to streamline operations and drive customer engagement.