H.C. Wainwright Reiterates Buy Rating on RCI Hospitality Holdings (RICK)

H.C. Wainwright analyst Scott Buck reiterated a Buy rating and $98.00 price target on RCI Hospitality Holdings (NASDAQ: RICK).

The analyst commented: "Prior to the market open on October 8, RCI Hospitality Holdings, Inc. reported F4Q24 sales figures. The company reported combined club and restaurant sales of $72.1M, down 2.6% versus the year ago period and just shy of our $73.4M revenue estimate for clubs and restaurants. The year-over- year decline was in part driven by 26 closure days at five locations in the Houston area due to Hurricane Beryl in July as well as a fire, closing a Dallas area club. While we wouldn't go so far as to call the release positive, we do see signs of progress that should give investors optimism moving into FY25. Same-store sales declined just 1.1% from year-ago levels, a modest improvement from the 1.5% decline announced for F3Q24, suggesting business improvement during F4Q24. This improvement was led by the club segment, which saw same store sales increase 2.2% from year-ago levels. While the restaurant business saw a second consecutive quarter of 16.2% decline in same-store sales, the company continues to be proactive in repositioning this business. This includes the sale of the underperforming San Antonio, TX, location that should drive some improvement in F1Q25 sales data. Further, we expect negative same-store sales trends to anniversary in F1Q25, suggesting better optics moving forward. In addition, the company announced it spent $7.8M on share repurchases during F4Q24 and completed $20.6M for fiscal 2024, reducing outstanding shares by 442,639. We view these elevated levels of repurchase activity as a sign of management confidence and would expect similar repurchase levels if shares remain at current depressed prices. With six additional properties expected to open in coming quarters, we believe the company is positioned to grow revenue meaningfully in FY25. We remain Buy-rated with a $98 price target."

For an analyst ratings summary and ratings history on RCI Hospitality Holdings click here. For more ratings news on RCI Hospitality Holdings click here.

Shares of RCI Hospitality Holdings closed at $41.50 yesterday.

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