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RCI Hospitality Holdings Inc (RICK) Reports Mixed Q2 Sales, Aligns with EPS Projections

  • Revenue: RCI Hospitality Holdings Inc (NASDAQ:RICK) reported $71.7 million in sales, a 1.3% increase from the previous year, aligning closely with the estimated revenue of $74.7335 million.

  • Net Income: Analysts projected a net income of $9.427 million, with full financial results to be disclosed by May 9, 2024.

  • Earnings Per Share (EPS): The company's EPS is expected to align with the analyst estimate of $1.01.

  • Same-Store Sales: RICK experienced a decline in same-store sales by 8.6%, indicating potential challenges in organic growth.

  • Share Buybacks: RCI repurchased 27,265 common shares for $1.5 million at an average price of $56.12 per share during the quarter.

  • Strategic Developments: RICK is progressing with its development schedule, acquisitions, and capital management, including securing a new bank loan and expanding nightclub and Bombshells locations.

On April 9, 2024, RCI Hospitality Holdings Inc (NASDAQ:RICK) released its 8-K filing, announcing sales figures for the fiscal second quarter ended March 31, 2024. The company, known for operating adult nightclubs and sports bars-restaurants, reported a slight increase in sales, despite facing challenges in same-store performance.

RCI Hospitality Holdings Inc operates through brands such as Rick's Cabaret, Vivid Cabaret, Tootsie's Cabaret, Club Onyx, and Jaguars Club, with the majority of its revenue derived from the Nightclubs segment. The company also operates Bombshells restaurants, a chain of restaurants and sports bars in Texas. The recent earnings report highlighted a mixed performance with an overall sales increase, but a notable decline in same-store sales across its segments.

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Eric Langan, President & CEO of RCI, commented on the quarter's performance:

"During 2Q24, increases in sales from last years acquisitions and new locations more than offset year-over-year declines in same-store sales and from clubs in transition. While we continue to work at improving SSS, we have made noticeable progress with our development schedule, acquisitions, capital management, and share buybacks."

Despite the challenges, RCI's Nightclubs segment saw a 4.2% increase in sales, while the Bombshells segment experienced a 10.4% decline. The company attributes the decline in Bombshells to a delay in implementing management and marketing changes and cost-cutting measures, which did not start until mid-February 2024.

RCI's strategic developments include the opening of new nightclubs and the anticipated launch of a Rick's Cabaret Steakhouse & Casino and Bombshells Sports Casino in Central City, CO. The company also secured a new bank loan, which is expected to provide additional funds for working capital at favorable rates and terms.

The company's share buyback program also continued, with RCI repurchasing shares and still having $13.0 million in remaining repurchase authorization at the end of the quarter. This capital management strategy reflects the company's confidence in its financial health and commitment to delivering value to its shareholders.

Investors and analysts will be closely monitoring the full financial results due by May 9, 2024, to gauge the company's profitability and assess the impact of the strategic initiatives on its bottom line. The detailed earnings report will provide a clearer picture of RCI's financial performance and its ability to navigate the operational challenges it faces.

For more information and updates, RCI Hospitality Holdings Inc will be hosting a conference call on X Spaces at 4:30 PM ET, with links available on the company's investor relations website.

RCI's performance in the fiscal second quarter demonstrates the company's resilience in a challenging market. While same-store sales have declined, the company's focus on strategic development and capital management, including share buybacks, indicates a proactive approach to driving growth and enhancing shareholder value. As RCI continues to expand and refine its operations, investors will watch for the full financial results to better understand the company's trajectory.

Stay tuned to GuruFocus.com for the latest financial news and expert analysis on RCI Hospitality Holdings Inc and other value investment opportunities.

Explore the complete 8-K earnings release (here) from RCI Hospitality Holdings Inc for further details.

This article first appeared on GuruFocus.