Winmark Corporation Reports 23.5% Revenue Growth in Q3 2026

Winmark Corporation reported a significant increase in financial performance for the third quarter and first nine months of fiscal 2026, as detailed in its latest 10-Q filing. For the three months ended September 26, 2026, the company generated total revenue of $27.9 million, up from $22.6 million in the same period last year, marking a 23.5% increase. Net income for the quarter was $11.8 million, compared to $11.1 million in the prior year, resulting in earnings per share of $3.29, up from $3.13. For the nine months ended September 26, 2026, total revenue reached $70.7 million, a 8.5% increase from $64.9 million in the same period of 2025, while net income was $31.5 million, slightly down from $31.7 million.

The company experienced notable changes in its revenue streams, particularly with the introduction of the North American Advertising Fund, which generated $3.8 million in contributions during the third quarter. This fund, initiated in July 2026, allows franchisees to contribute 2% of sales to enhance marketing efforts. Additionally, royalties from franchisees increased by 3.8% to $21.7 million in the third quarter, driven by higher retail sales and an increase in the number of franchise locations. The company also reported a rise in software revenue, attributed to a new monthly fee introduced in September 2026.

Operationally, Winmark Corporation's franchise network expanded to 1,398 locations as of September 26, 2026, with 35 new stores opened and 15 closed during the first nine months of the year. The company successfully renewed all 77 franchise agreements that were up for renewal, indicating strong franchisee commitment. The total number of employees remained stable, supporting the company's operational needs without significant fluctuations in headcount.

In terms of financial health, Winmark's cash and cash equivalents increased to $28.1 million from $39.9 million year-over-year, reflecting a decrease primarily due to cash used in financing activities, including $10.8 million in dividends and $8.1 million in stock repurchases. The company reported a net cash provided by operating activities of $35.5 million for the first nine months of 2026, slightly down from $36.4 million in the same period of 2025. Winmark maintains a strong balance sheet with no outstanding revolving loans under its credit facility, and it continues to comply with all financial covenants.

Looking ahead, Winmark Corporation remains focused on supporting its franchise partners to drive revenue growth, while also managing expenses effectively. The company anticipates that its cash flow from operations, combined with its existing credit facilities, will be sufficient to meet its operational needs through 2027. Management is optimistic about the future, emphasizing the importance of franchisee performance and the potential for new franchise openings as key drivers of growth.