RCI Hospitality (RICK) Reports Q3 Business Update, Comps Fall
RCI Hospitality Holdings, Inc. RICK provided an update on its business for the third quarter of fiscal 2023. The company stated that the results are preliminary and subject to final closing. The company expects to release its third-quarter fiscal 2023 results tentatively on Aug 9, 2023.
Preliminary Revenue Results
During the fiscal third quarter, sales from Nightclubs came in at $62 million, reflecting a rise of 14.1% year over year. The upside was primarily backed by contributions from FY22-FY23 acquisitions ($12.1 million) and two reopened/reformatted clubs ($1.1 million). However, this was partially offset by a decline in Same-Store Sales (7.3% year over year) and lower contributions from the closure of three Texas clubs ($0.5 million).
Sales from Bombshells restaurants in the fiscal third quarter came in at $14.4 million, down 9% from the prior-year quarter’s levels. The segment’s same store sales were down 18.2% year over year. The downside was primarily caused by the uncertain macroeconomic environment.
Other Updates
The business puts a strong emphasis on mergers and acquisitions to buy the right clubs in the appropriate markets. Additionally, it focuses on the growth of Bombshells restaurants to achieve critical mass, raise brand recognition and sell franchises.
The company is upbeat about the newly-remodeled/expanded Baby Dolls Fort Worth property (tentatively to be completed in late June) and the reopening of one Texas club (in July). The company anticipates the properties to drive top-line growth.
In terms of Bombshells restaurants, the company is optimistic with the opening of a new location in the Houston suburb of Stafford, slated to open in fourth-quarter fiscal 2023. This apart, the company initiated construction at the Rowlett (TX location) and revealed a pipeline of properties, including Lubbock (TX location) and a restaurant space in Downtown Denver. The company anticipates the properties to open in fiscal 2024.
In addition to the expansion, the company claimed to have started the application process for a liquor licence. It also mentioned the evaluation of gaming licences for two casinos in Central City, CO. The two are slated to debut in FY24.
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Shares of the company have gained 33.8% in the past year compared with the industry’s 31.2% growth.
Zacks Rank & Key Picks
RCI Hospitality currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
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The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and earnings per share (EPS) suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
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The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 33.9% and 89.3%, respectively, from the year-ago period’s levels.
Bluegreen Vacations Holding Corporation BVH carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 24.7%, on average. Shares of BVH have increased 55% in the past year.
The Zacks Consensus Estimate for BVH’s 2023 sales and EPS indicates a rise of 3.6% and 17.6%, respectively, from the year-ago period’s levels.
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