Motley Fool Money The Business of Nightclubs
Sep 25, 2023
Jason Moser, an investment analyst at The Motley Fool, joins Eric Langan, CEO of RCI Hospitality, to dive deep into the nightlife business. Langan shares his insights on consumer spending, capital allocation, and lessons from his rise to CEO. They discuss the nightclub industry's recovery post-COVID, innovative financial strategies, and unique approaches to stock buybacks. Additionally, they explore advancements in checkout-free technology and its implications for retail and hospitality, revealing the exciting dynamics within these sectors.
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From Baseball Cards to CEO
- Eric Langan's journey to CEO began at 19 after his wife left with his daughter.
- He started dating an entertainer, disliked the club's environment, and opened his own using his baseball card collection.
Capital Allocation Lesson
- Langan discovered accounting irregularities in a potential acquisition, leading him to learn about capital allocation.
- This led him to prioritize stock buybacks when free cash flow yield is high.
Investment Strategy
- Prioritize stock buybacks when free cash flow yield exceeds 10%.
- Aim for a 25-33% return on investments beyond buybacks.
