RCI Hospitality Holdings, Inc. reported preliminary, unaudited results for the quarter ended September 30 2025 and for the full fiscal year. Total revenue fell 0.4% to $70.9 million in Q4, and the company’s full‑year revenue declined 5.8% to $279.4 million from $295.6 million in FY 2024. Operating cash flow for the quarter was $13.7 million, and free cash flow—defined as operating cash flow less maintenance capital expenditures—was $13.1 million. The company also filed a Form 12b‑25 notice with the SEC, indicating that the final 10‑K filing will be delayed.
Nightclubs revenue remained essentially flat at $60.9 million, reflecting steady traffic and pricing in the core segment. Bombshells revenue dropped to $9.4 million, a decline largely attributable to the sale of five underperforming locations announced earlier in the year. The divestitures reduced the Bombshells portfolio but also removed low‑margin assets, positioning the company to focus on higher‑yield properties. The revenue mix shift explains the modest overall decline despite stable Nightclubs performance.
RCI’s capital allocation strategy accelerated in FY 2025. The company completed a $30 million repurchase of 9.5% of shares from ADW Capital Partners in November, and it has bought back roughly 3% of outstanding shares in FY 2025, with an additional 10% repurchased in the first quarter of 2026 to date. These actions are part of the “Back to Basics” plan, which also includes portfolio optimization and a cash‑generating partnership in Austin. The accelerated buyback program signals management’s confidence in the company’s intrinsic value and a commitment to returning capital to shareholders.
Leadership changes and legal challenges add complexity to the earnings picture. In November, CEO Eric Langan and CFO Bradley Chhay stepped down amid a tax‑fraud and bribery scheme, and interim CEO Travis Reese and interim CFO Albert Molina were appointed. RCI is also facing a class‑action lawsuit alleging securities fraud related to the scheme, and regulatory scrutiny in Colorado is ongoing. These developments underscore the risk environment surrounding the company’s operations and governance.
Looking ahead, RCI maintains its FY 2029 targets of $400 million in revenue and $75 million in free cash flow. While the company’s Q4 and FY 2025 results show a slight revenue contraction, the management narrative emphasizes portfolio optimization, cost discipline, and strategic share repurchases as levers to sustain profitability. The company’s guidance remains unchanged, but the leadership transition and legal exposure may influence investor perception of long‑term risk and capital allocation priorities.
The company’s performance reflects broader economic uncertainty that has dampened traffic and same‑store sales across the hospitality sector. Despite these headwinds, the “Back to Basics” plan and the accelerated share‑repurchase program provide a framework for maintaining shareholder value. Investors will likely weigh the revenue decline against the company’s disciplined capital allocation and the potential upside from a more focused portfolio and improved cash generation.
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