RCI Hospitality Holdings, Inc. (Nasdaq: RICK)

Analyst: Rob McGuire
Target Price: $110.00 / Rating: Buy

RCI Hospitality Holdings, Inc. (“RCI” or the “Company”) is the largest publicly traded owner of adult entertainment nightclubs as well as the owner and operator of a military-themed sports bar and restaurant chain called Bombshells. The Company, previously named Rick’s Cabaret International, Inc., was founded in 1983 and held an initial public offering in 1995. In 1998, the Company merged with Taurus, Inc., a public company that owned the XTC Cabaret chain managed by RCI’s current CEO (Eric Langan).

RCI markets its nightclubs through a multitude of proprietary brands and formats, distancing itself from other undermanaged adult entertainment establishments. The Company’s brands separately target audiences of various socioeconomic statuses, ages, and ethnicities. One of RCI’s historical hallmarks has been a high-end nightclub experience, featuring food, cocktails, and diverse entertainment.

Bombshells pays homage to all US military branches and servicemembers, offering free meals to veterans on Veteran’s Day and a standing discount of 20% off of meals for active-duty personnel. Locations are typically 10,000 to 12,000 square feet and are designed with hanger-like interiors and outdoor patios. The high-energy atmosphere is focused on sports and social enjoyment, featuring multiple TVs, DJs, bands, and waitstaff with military-inspired uniforms. The Bombshells Girls, members of the waitstaff, are a main attraction, and emphasize guest interaction with the objective of generating a fun environment.

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Comprehensive Report
(May 23, 2022)

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