RCI Hospitality reports Q4 sales decline amid economic headwinds

HOUSTON - RCI Hospitality Holdings, Inc. (NASDAQ:RICK) reported a 3.1% decline in combined fourth-quarter sales to $69.8 million for the period ended September 30, 2025, according to a company press release. The company, which maintains impressive gross profit margins of 85%, has seen its stock decline nearly 49% year-to-date, according to InvestingPro data.

The adult nightclub operator’s core Nightclubs segment posted a slight 0.4% increase in sales to $60.5 million, despite same-store sales declining 4.4%. The company’s Bombshells restaurant segment saw a more significant drop, with sales falling 21.2% to $9.4 million and same-store sales down 19.5%. Trading at an EV/EBITDA multiple of 6.25x, InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value.

For the full fiscal year 2025, combined sales decreased 5.5% to $276.6 million compared to the previous year, with Nightclubs sales relatively flat at $240.8 million and Bombshells sales down 29.2% to $35.8 million. Despite the sales decline, the company has maintained its dividend payments for 10 consecutive years, with a current yield of 0.95%.

The company attributed the results to "persistent economic uncertainty" creating "traffic-driven pressure on same-store sales" across both business segments, while noting that acquisitions and club reformatting partially offset some declines. For deeper insights into RCI Hospitality’s financial health and future prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.

RCI reported several operational developments, including the reopening of Dallas Showclub as XTC 2.0 with a BYOB concept, ongoing negotiations to sell underperforming properties, and progress on new location openings. The company expects to open its final Bombshells location under development in Rowlett, Texas this December.

The company also received zoning approval to rebuild its Baby Dolls Fort Worth location, which was lost to fire in July 2024, and reported advancing plans for a new Baby Dolls club in West Fort Worth.

RCI operated 60 nightclub locations and 11 restaurant locations that contributed to fourth-quarter sales, including four newly acquired clubs that generated $3.2 million in revenue during the period.

In other recent news, RCI Hospitality Holdings, Inc. reported its third-quarter 2025 earnings, which fell short of expectations. The company’s earnings per share (EPS) were $0.77, missing the forecasted $1.24, and revenue was $71.1 million, below the anticipated $78.2 million. Additionally, RCI Hospitality has been active in modifying its financial arrangements, having entered into new debt agreements and raising $3.25 million in new notes. The company reached agreements with several holders to extend the maturity dates of their 12% unsecured promissory notes, totaling $2.8 million in principal. In other developments, RCI Hospitality declared a quarterly cash dividend of $0.07 per share for its fiscal fourth quarter of 2025. During its recent annual meeting, shareholders elected six directors to the board, including Eric S. Langan and Travis Reese. These updates reflect RCI Hospitality’s ongoing strategic and financial maneuvers.

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