RCI Hospitality Holdings, Inc. (RICK) has reported a 27.95 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $0.38 million, or $0.04 a share in the quarter, compared with $0.53 million, or $0.05 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $3.02 million, or $0.31 a share compared with $2.17 million or $0.21 a share, a year ago.

Revenue during the quarter went up marginally by 0.76 percent to $33.04 million from $32.79 million in the previous year period. Gross margin for the quarter contracted 8 basis points over the previous year period to 85.31 percent. Total expenses were 97.20 percent of quarterly revenues, up from 90.23 percent for the same period last year. That has resulted in a contraction of 697 basis points in operating margin to 2.80 percent.

Operating income for the quarter was $0.92 million, compared with $3.20 million in the previous year period.

However, the adjusted operating income for the quarter stood at $6.28 million compared to $5.29 million in the prior year period. At the same time, adjusted operating margin improved 288 basis points in the quarter to 19 percent from 16.12 percent in the last year period.

Chief executive officer Mr. Langan "We ended FY16 in the best shape we've been in, thanks to the first full year implementation of our disciplined approach to capital allocation," Mr. Langan said. "We improved our cash generating ability. We restored same store and total sales growth and expanded margins on a non-GAAP basis. Using bank financing at conventional rates, we acquired the Rick's Cabaret New York real estate, which, along with the acquisition of the Tootsie's Cabaret Miami real estate in 4Q15, reduced our cost of occupancy, one of our largest fixed costs. Tootsie's and Rick's New York are our two largest, revenue producing clubs."