RCI Hospitality Holdings, Inc. (NASDAQ: RICK) completed a share repurchase of 821,000 shares from ADW Capital Partners, L.P. on November 21, 2025, paying $36.54 per share for a total of $30 million. The buyback cut the company’s share count by 9.5%, bringing the total outstanding shares to roughly 7.85 million.
Prior to the repurchase, RCI had about 8.66 million shares outstanding. The transaction is a key execution of the company’s “Back to Basics” capital allocation plan, which aims to reduce shares to 7.5 million by fiscal year 2030 and to double free‑cash‑flow per share to approximately $10 by fiscal year 2029. The repurchase is immediately accretive to free‑cash‑flow per share, reflecting management’s view that the shares are undervalued.
The $30 million purchase was funded with $8 million in cash and $22 million of two‑year seller financing at 12% interest. The repurchase price of $36.54 is well above the market price of about $24.60, underscoring the company’s confidence in its intrinsic value. The transaction boosts earnings per share and free‑cash‑flow per share, aligning with the company’s strategy to enhance shareholder value.
RCI’s stock had fallen 56% from its 52‑week high of $61.66, trading between $21.97 and $24.50 in late November. The buyback signals management’s conviction in the stock’s undervaluation and may support a higher valuation. Analyst consensus includes a mix of ratings, with one analyst issuing a strong‑buy recommendation and a target of $98.
Segment performance in the most recent quarter shows revenue down 3.1% to $69.8 million, with Nightclubs sales slightly up 0.4% and Bombshells sales down 21.2%. Net income turned positive at $4.1 million versus a $5.2 million loss a year earlier. The repurchase aligns with the company’s turnaround strategy, leveraging improved profitability while addressing the weaker restaurant segment.
ADW Capital Partners sold its stake at a premium to market, likely seeking liquidity and capitalizing on RCI’s perceived undervaluation. The seller financing terms provide RCI with flexibility while giving ADW a return on its investment.
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