Winmark Corporation Reports $81.3 Million Revenue for Fiscal Year 2024, Franchise Royalties Increase

Winmark Corporation reported a total revenue of $81.3 million for the fiscal year ending December 28, 2024, a decrease of 2.3% from $83.2 million in 2023. The company's royalties, which are its primary source of income, increased by 2.8% to $72.2 million, up from $70.2 million in the previous year. This growth in royalties was attributed to an increase in the number of franchise stores, which totaled 1,350 across the United States and Canada as of the end of 2024. However, leasing income saw a significant decline, dropping to $1.8 million from $4.8 million in 2023, reflecting the company's decision to phase out its leasing operations.

In terms of operational metrics, Winmark's franchise system-wide sales reached approximately $1.6 billion in 2024, up from $1.59 billion in 2023. The company successfully opened 142 new franchise locations while closing 16, resulting in a net increase of 126 stores. The renewal rate for franchise agreements remained high at 98%, indicating strong franchisee satisfaction and stability within the business model. The company also reported that its Canadian franchises contributed approximately $7.3 million in revenue, marking a steady increase from $6.8 million in 2023.

Strategically, Winmark has focused on enhancing its franchise model by providing franchisees with advanced technology and support to facilitate multi-channel retailing. The company has developed an e-commerce platform that allows franchisees to market and sell inventory online, which has been instrumental in driving consumer engagement and brand awareness. Additionally, Winmark has signed 79 new franchise agreements, with most expected to open in 2025, indicating a positive outlook for future growth.

Financially, Winmark's selling, general, and administrative expenses decreased slightly by 0.7% to $24.9 million, reflecting effective cost management. The company ended the year with $12.3 million in cash and cash equivalents, down from $13.4 million in 2023. Despite the decrease in total revenue, net income remained relatively stable at $39.9 million, compared to $40.2 million in the previous year, resulting in earnings per share of $11.36.

Looking ahead, Winmark anticipates continued growth in its franchising segment, driven by the opening of new stores and the ongoing support of existing franchisees. The company remains committed to its sustainability mission and aims to leverage its position in the resale market to capture a larger share of consumer spending. However, management acknowledges potential risks, including economic fluctuations and competition from both traditional and online retailers, which could impact future performance.