Winmark Corporation Reports Revenue Growth and Increased Net Income for Q2 and First Half of Fiscal 2025

Winmark Corporation reported its financial results for the second quarter and first half of fiscal 2025, revealing a total revenue of $20.4 million for the quarter ending June 28, 2025, a slight increase from $20.1 million in the same period last year. For the first six months, revenue reached $42.3 million, up from $40.2 million in the prior year. The company's net income for the second quarter was $10.6 million, compared to $10.4 million in the same quarter of 2024, while net income for the first half increased to $20.6 million from $19.3 million. Earnings per share for the quarter were $3.00, up from $2.97, and for the first half, they rose to $5.81 from $5.49.

The company experienced a 4.0% increase in royalties, which amounted to $36.4 million for the first half of 2025, driven by a rise in franchise store numbers and higher retail sales. However, leasing income saw a significant decline, dropping to $46,600 in the second quarter from $524,400 in the same period last year, primarily due to reduced operating lease income. Merchandise sales also decreased, totaling $1.7 million for the first half, down from $2.0 million in 2024, attributed to lower technology purchases by franchisees.

Winmark's operational metrics indicate a stable franchise network, with 1,371 franchises operating under its various brands as of June 28, 2025. The company renewed 60 out of 61 franchise agreements available for renewal during the first half of the year, reflecting a renewal rate of 98%. The company’s selling, general, and administrative expenses increased by 7.4% to $14.0 million for the first half, driven by higher technology and compensation-related costs.

In terms of liquidity, Winmark ended the quarter with $28.9 million in cash and cash equivalents, a slight decrease from $29.4 million a year earlier. Operating activities generated $24.1 million in cash during the first half, an increase from $21.6 million in the previous year, primarily due to higher net income and reduced non-cash working capital. The company continues to maintain compliance with its financial covenants under its credit facilities, which include a $30 million term loan and a $20 million line of credit, both secured by its assets.

Looking ahead, Winmark anticipates continued growth in royalties and franchise operations, although it expects leasing income to decline as it completes the run-off of its leasing portfolio. The company remains focused on supporting its franchise partners and managing expenses effectively to sustain its operating income. Management believes that its current cash position, along with cash generated from operations, will be sufficient to meet its obligations through 2026.