Winmark Corporation reported its financial results for the first quarter of 2026, revealing total revenue of $20.8 million, a decrease from $21.9 million in the same period of 2025. The decline was primarily attributed to the cessation of leasing income, which fell to zero from $2.3 million in the previous year, as the company completed the run-off of its leasing portfolio. However, royalties from franchise operations increased by 8.4% to $19.3 million, driven by higher retail sales from franchisees and an increase in the number of franchise locations.
The company's net income for the quarter was $9.3 million, down from $10.0 million in the prior year, resulting in earnings per share of $2.59 compared to $2.81. Selling, general, and administrative expenses rose by 5.8% to $7.9 million, reflecting increased compensation-related costs. Despite the overall revenue decline, the franchising segment's operating income improved to $12.4 million from $11.4 million, indicating a positive trend in franchise performance.
Winmark's operational metrics showed a total of 1,383 franchises as of March 28, 2026, an increase from 1,378 at the end of 2025. The company successfully renewed all 23 franchise agreements that were up for renewal during the quarter, highlighting strong franchisee commitment. The company continues to focus on supporting its franchise partners to enhance their revenue generation capabilities, which is critical for future growth.
In terms of liquidity, Winmark ended the quarter with $19.9 million in cash and cash equivalents, a decrease from $22.0 million a year earlier. Cash provided by operating activities was $11.9 million, down from $15.1 million in the first quarter of 2025, primarily due to increased working capital needs. The company maintains a line of credit with CIBC Bank USA, with no outstanding revolving loans and $30 million in delayed draw term loans, which are expected to support its operational needs through 2026.
Looking ahead, Winmark's management remains optimistic about its ability to generate sufficient cash flow to meet operational expenses and debt obligations. The company plans to leverage its existing cash reserves and credit facilities to navigate potential market challenges. The focus will continue to be on franchise growth and maintaining strong relationships with franchise partners to drive revenue and profitability in the coming quarters.
About WINMARK CORP
Winmark Corporation is a franchisor specializing in value-oriented resale retail brands, including Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. The company supports entrepreneurs in operating franchise stores that buy, sell, and trade gently used merchandise across various categories, promoting sustainability and community recycling. Its business model emphasizes franchise growth, brand support, and value-driven consumer offerings in North America.
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