RCI Hospitality Aims for $400M Revenue and $75M Free Cash Flow by 2029 Through Strategic Acquisitions and Real Estate Optimization.

RCI Hospitality Holdings is targeting $400M in revenue and $75M in free cash flow by 2029. The company is focusing on strategic acquisitions and real estate optimization to achieve this goal. Despite economic uncertainty, the company's nightclub revenues remained nearly level in Q3 2025. CEO Eric Scott Langan attributed this resilience to the company's ability to adapt to changing market conditions.

RCI Hospitality Holdings, Inc. (RICK) has set ambitious targets for the next five years, aiming to achieve $400 million in revenue and $75 million in free cash flow by 2029. The company's CEO, Eric Scott Langan, attributed the company's resilience in the third quarter of 2025 to its ability to adapt to changing market conditions, despite economic uncertainty. Nightclub revenues remained nearly level at $62.3 million, a 0.9% decline year-over-year, influenced by a 3.7% drop in same-store sales and the absence of Baby Dolls Fort Worth, but offset by new or rebranded clubs.

Langan highlighted the company's strategic capital allocation plan, which includes allocating 40% of free cash flow to club acquisitions and 60% to share buybacks, debt reduction, and dividends. This strategy is aimed at achieving annual free cash flow per share growth of 10% to 15%. By 2029, the company targets a revenue of $400 million, $75 million in free cash flow, and 7.5 million shares outstanding, which would double the free cash flow per share from the previous year.

The company's focus on optimizing its club portfolio through acquisitions and divestitures has been a key driver of its performance. In Q3 2025, RCI Hospitality acquired two upscale nightclubs, Platinum West in South Carolina and Platinum Plus in Allentown, Pennsylvania, and opened Rick's Cabaret and Steakhouse in Central City, Colorado. Additionally, the company repurchased more than 75,000 shares for $3 million, reducing the share count to approximately 8.76 million.

However, the company's financial results were impacted by self-insurance actuarial reserves, which increased to $9.4 million year-to-date. Langan acknowledged the uncertainty surrounding these reserves but expressed hope for normalization once a captive insurance company is established. The company's free cash flow margin rose to 19% from 11% in the previous quarter, while adjusted EBITDA margin remained steady at 22%.

RCI Hospitality's strategic focus on core nightclub operations, selective M&A, and potential real estate monetization positions the company well to achieve its long-term targets. Despite the challenges posed by economic uncertainty and insurance reserve expenses, the company's disciplined capital allocation strategy and operational focus on same-store sales improvement provide a solid foundation for future growth.

References:

[1] https://seekingalpha.com/news/4483618-rci-hospitality-targets-400m-in-revenue-and-75m-free-cash-flow-by-2029-amid-strategic