Monday, February 13, 2023
With more than 60 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, Scarlett’s Cabaret, Diamond Cabaret, and PT’s Showclub. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.
Joe Gomes, Managing Director – Generalist Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q23 Operating Results. First quarter revenue came in at $70 million, up 13.2% y-o-y. Adjusted EBITDA in the quarter was $20.5 million, up 13.9% y-o-y. Impacted by non-comp expense and D&A, net income fell 3.2% to $10.2 million. EPS was $1.11 and adjusted EPS was $1.19, down 0.9% and up 8.2%, respectively, y-o-y. We had forecast revenue of $72 million, adjusted EBITDA of $23 million, and EPS of $1.32.
Segments. Nightclubs revenue rose 20.3% to $56.3 million, driven by acquired clubs and a 1.2% SSS growth, with a 40.4% operating margin. Bombshells continues to face challenges with revenue of $13.4 million down 9.5%, SSS off 13.9%, and a 13.8% operating margin.
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