WINA · Winmark Corporation

Winmark Corporation's first quarter results for the period ended March 28, 2026, showed net income of $9.3 million, or $2.50 per diluted share, compared to $10.0 million, or $2.71 per diluted share, in the prior year quarter. The decline was primarily driven by the absence of $2.2 million in leasing income from a customer litigation settlement recognized in Q1 2025, which reduced total revenue to $20.8 million from $21.9 million. Royalties, the core revenue stream, grew to $19.3 million from $17.8 million, reflecting strength in the franchisor model. Merchandise sales declined to $0.7 million from $0.9 million, while franchise fees and other revenues saw modest increases. Operating income fell to $12.4 million from $13.6 million, with selling, general, and administrative expenses rising to $7.9 million from $7.4 million, partly offset by lower cost of merchandise sold. Management highlighted strategic enhancements, including a new North American Ad Fund for Plato’s Closet and a modernized point-of-sale system, aimed at funding ongoing marketing, technology, and innovation for franchisees. These initiatives, detailed in a prior 8-K filing on March 16, 2026, underscore a focus on long-term franchisee support amid 1,383 operating franchises and over 2,800 available territories. Balance sheet improvements included cash and equivalents rising to $19.8 million from $10.3 million at year-end, supporting robust operating cash flow of $11.9 million. Despite a shareholders' equity deficit of $46.2 million, driven by debt levels around $60 million, the company maintains steady interest expense and approved a $1.02 per share quarterly dividend, payable June 1, 2026, signaling confidence in cash generation.