Executive Summary

Q4 2025 club and restaurant sales totaled $69.8M, down 3.1% year over year; Nightclubs were resilient at $60.5M (+0.4% YoY) while Bombshells fell to $9.4M (-21.2% YoY) as divestitures and traffic softness weighed on SSS; full Q4 GAAP financials will be in the upcoming 10-K .
Same-store sales remained pressured: Nightclubs -4.4% YoY; Bombshells -19.5% YoY, reflecting macro uncertainty and prior closures; acquisitions and reformatting partially offset Nightclub declines .
Management highlighted development catalysts: Dallas Showclub reopens as XTC 2.0, final Bombshells opening in Rowlett (Dec), zoning approvals for Baby Dolls Fort Worth rebuild, and ongoing negotiations to sell non-income/underperforming real estate to reduce debt and fund buybacks/dividends .
Sequential trend context: Q3 showed total revenues $71.1M with GAAP EPS $0.46 and adjusted EBITDA $15.3M; Bombshells improved sequentially vs Q2, and free cash flow rose to $13.3M; insurance self-insurance accruals continued to burden reported EBITDA but not FCF .
Estimates context: S&P Global consensus for Q4 2025 EPS and revenue was unavailable; we anchor comparisons to company-reported sales and prior quarters and note estimates are not available from S&P Global at this time (Values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

Nightclubs: Total sales grew slightly (+0.4% YoY) to $60.5M despite closures and macro headwinds; acquisitions/reformatted clubs helped offset SSS pressure. “Total FY25 Nightclubs sales held relatively steady year-over-year, as acquisitions and club reformatting partially offset same-store sales declines and the impact of closures.”
Development catalysts: Dallas Showclub reopening as “XTC 2.0” BYOB, Rowlett Bombshells opening in December, and zoning/plan approvals for Baby Dolls rebuilds position 2026 revenue drivers .
Capital allocation path: Management reiterated “Back to Basics” plan—potential real estate monetization to reduce debt and fund buybacks/dividends; “Successful completion...deploy more cash toward acquisitions, stock buybacks, debt paydown, and dividends” .

What Went Wrong

Same-store sales: SSS declines persisted (-4.4% Nightclubs, -19.5% Bombshells) amid “persistent economic uncertainty” impacting traffic and spend across clubs/restaurants .
Bombshells softness: Segment sales fell 21.2% YoY to $9.4M on earlier divestitures and weak SSS, partially offset by new Denver and Lubbock locations .
Insurance accrual drag (prior quarter context): Self-insurance actuarial reserves created non-cash charges that depressed reported EBITDA (not FCF); management plans a captive to normalize premiums but timing remains uncertain .

Financial Results

Note: Q4 2025 “club & restaurant sales” exclude non-core operations; full Q4 GAAP results (revenue, EPS, margins) will be reported in the 10-K .

Metric	Q2 2025	Q3 2025	Q4 2025
Total Revenues ($USD Millions)	$65.9	$71.1	N/A – to be reported in 10-K
GAAP EPS ($USD)	$0.36	$0.46	N/A – to be reported in 10-K
Adjusted EBITDA ($USD Millions)	$14.2	$15.3	N/A – to be reported in 10-K
Adjusted EBITDA Margin (%)	~22%	~22%	N/A – to be reported in 10-K
Free Cash Flow ($USD Millions)	$6.9	$13.3	N/A – to be reported in 10-K

Segment performance:

Segment Metric	Q2 2025	Q3 2025	Q4 2025
Nightclubs Revenues/Sales ($USD Millions)	$57.5 (revenues)	$62.3 (revenues)	$60.5 (sales)
Bombshells Revenues/Sales ($USD Millions)	$8.2 (revenues)	$8.6 (revenues)	$9.4 (sales)
Other Revenues ($USD Millions)	$0.106	$0.200	N/A (not disclosed)

KPIs and sales trends:

KPI	Q2 2025	Q3 2025	Q4 2025
Combined Club & Restaurant Sales ($USD Millions)	$65.4	$70.5	$69.8
Nightclubs SSS YoY (%)	-3.5%	-3.7%	-4.4%
Bombshells SSS YoY (%)	-13.4%	-13.5%	-19.5%
Share Repurchases (Shares, $USD Millions)	56,875; $2.9	75,325; $3.0	N/A
Debt ($USD Millions, quarter end)	$241.5	$241.3	N/A

Guidance Changes

Management did not issue quantitative Q4 guidance; reiterated long-term capital allocation and operational targets.

Metric	Period	Previous Guidance	Current Guidance	Change
Free Cash Flow per Share Growth	FY25–FY29	10–15% annually	10–15% annually	Maintained
Total Revenue Target	FY2029	~$400M	~$400M	Maintained
Free Cash Flow Target	FY2029	~$75M	~$75M	Maintained
Shares Outstanding Target	FY2029	~7.5M	~7.5M	Maintained
Club Acquisitions Target	Annual	~$6M adjusted EBITDA/year	~$6M adjusted EBITDA/year	Maintained
Bombshells Operating Margin Target	Ongoing	~15% margin	~15% margin	Maintained
Dividend Policy	Ongoing	Modest annual increases	Modest annual increases	Maintained
Capital Allocation Mix	Ongoing	~40% FCF to acquisitions; ~60% to buybacks/debt/dividends	Same	Maintained

Earnings Call Themes & Trends

Note: No Q4 2025 call transcript identified; latest commentary is Q3 2025.

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
Macro uncertainty (tariffs, tax bill)	Weather and macro hurt SSS; spend down in VIP/bottle service	Nightclub revenues nearly level; macro uncertainty cited; service revenue slightly up, alcohol down	“Persistent economic uncertainty” pressured traffic and SSS	Persistent headwind
Insurance/self-insurance reserves	Accrual burdening EBITDA; annualized ~$8.8–$9M; captive in progress	Continued non-cash accruals; intent to form captive; potential “sell the book” later	Not discussed in Q4 press release	Normalization expected once captive established
Acquisitions/reformatting	Flight Club (Detroit) acquired; Bombshells Denver opened; rebranded Chicas Locas El Paso	Platinum West (SC), Platinum Plus (PA) acquired; Rick’s Cabaret Central City opened; buybacks continued	Dallas Showclub reopening as XTC 2.0; continued property sale negotiations	Continued execution
Bombshells strategy	Divested 5 underperformers; margins targeted 15%; Denver opening	Sequential improvement; Lubbock pre-opening costs; corporate reserves affected opex	Segment sales down; new locations Denver/Lubbock offset; final build Rowlett in Dec	Portfolio cleanup; rebuild underway
Legal/settlements	Lower impairments; weather impact; industry softness	Lawsuit settlement expense $3.3M offset by insurance gain $1.1M	Not addressed in sales release; legal environment ongoing context	Mixed, watch 10-K

Management Commentary

“Total FY25 Nightclubs sales held relatively steady year-over-year, as acquisitions and club reformatting partially offset same-store sales declines and the impact of closures.” — Eric Langan, CEO
“Following the 1Q25 divestiture of underperforming Bombshells locations, restaurant sales improved sequentially, supported by successful openings in Denver and Lubbock and a change in management.”
“Successful completion of these developments will enable us to generate new revenues and deploy more cash toward acquisitions, stock buybacks, debt paydown, and dividends in line with our ‘Back to Basics’ Capital Allocation Plan.”
Long-term capital plan: “Allocate 40% of free cash to club acquisitions and 60% to share buybacks, debt reduction and dividends…targets are $400M in revenue, $75M in free cash flow and 7.5M shares outstanding by fiscal 2029.”

Q&A Highlights

Insurance accrual/captive timeline: Management emphasized the non-cash nature of self-insurance actuarial reserves impacting EPS/EBITDA, with a goal to establish a captive and potentially “sell the book” of claims to reverse excess reserves over time .
Real estate monetization: ~$28M value of non-core/underperforming properties under negotiation; proceeds would reduce debt and enhance liquidity for buybacks/acquisitions; mix of debt paydown vs cash depends on asset leverage .
Bombshells outlook and potential sale: Portfolio cleaned up; strong early performance noted at Lubbock; management open to selling Bombshells real estate+operations at fair value (illustrative $75–$85M ranges discussed), with preference to avoid sale-leasebacks .
Acquisition pipeline: Active dialogues post industry expo; disciplined 3–5x adjusted EBITDA multiples with emphasis on licensing protections and market durability .

Estimates Context

S&P Global consensus (EPS, revenue) for Q4 2025 was unavailable; no estimate comparisons can be made at this time (Values retrieved from S&P Global).
Given absent consensus, investor benchmarking should focus on sales momentum and sequential KPIs (Bombshells openings, Nightclubs acquisitions, FCF/adjusted EBITDA trends) relative to Q2/Q3 actuals .

Key Takeaways for Investors

Near-term trading: Watch Dallas XTC 2.0 reopening, Rowlett Bombshells opening, and Baby Dolls rebuild approvals—visible catalysts for traffic and revenue, potentially supportive of sentiment despite SSS pressure .
Portfolio optimization: Ongoing sales of non-core/underperforming properties could unlock cash to reduce leverage and accelerate buybacks, a positive for per-share metrics and equity value .
Bombshells inflection: Despite YoY declines, sequential improvement and new units (Denver, Lubbock, Rowlett) may stabilize segment contributions; management’s willingness to monetize at the right price creates an upside optionality .
Insurance normalization: Captive formation could reduce non-cash actuarial reserve drag on reported EBITDA, improving optics versus consistently strong FCF; monitor updates in 10-K and subsequent calls .
Acquisitions pipeline: Continued disciplined nightclub M&A (3–5x EBITDA) with focus on license durability supports long-term FCF targets and margin resilience .
Macro sensitivity: VIP/bottle-service spend remains the swing factor; as tax/tariff uncertainty eases and “money moves,” clubs should see higher-margin service recovery—key for margin expansion .
Next datapoints: FY25 10-K (full Q4 GAAP results), captive formation timeline, any real estate transaction closings, and early performance of new openings will frame 2026 trajectory .

RCI HOSPITALITY HOLDINGS, INC. (RICK)·Q4 2025 Earnings Summary