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WINMARK CORP (WINA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered modest growth: revenue $20.42M (+1.5% YoY), diluted EPS $2.89 vs $2.85 LY; net income $10.60M, with operating income $13.06M and healthy profitability sustained .
  • Against Wall Street consensus, WINA slightly beat: EPS $2.89 vs $2.88*, revenue $20.42M vs $20.31M*; scale of beats suggests steady execution rather than a catalyst-level surprise (Values retrieved from S&P Global) .
  • Management highlighted broad-based sales strength across all brands and continued investments in operations, technology, marketing and innovation to reinforce resale leadership .
  • Dividend affirmed at $0.96 per share for Q3 payment, following Q1’s $0.06 increase; income support remains a shareholder-friendly feature amid consistent cash generation .
  • Franchise footprint expanded to 1,371 open units (from 1,363 in Q1 and 1,350 in Q4 2024), with 77 awarded but not yet open, underpinning multi-brand growth visibility .

What Went Well and What Went Wrong

  • What Went Well

    • Royalty-driven topline growth with total revenue up to $20.42M (+$0.30M YoY) while diluted EPS improved (+$0.04 YoY), demonstrating resilient unit-level performance .
    • CEO emphasized brand-wide sales strength: “Sales performance for our franchise partners across all brands increased during the quarter,” reinforcing positive demand and system health .
    • Strong operating profitability: income from operations $13.06M with robust margins; cash rose to $28.77M by quarter-end, enhancing financial flexibility .

  • What Went Wrong

    • Leasing income fell to $0.05M vs $0.52M LY (and $2.31M in Q1 due to litigation settlement), creating a modest non-royalty headwind to revenue mix and comparability .
    • SG&A increased to $6.59M (vs $6.24M LY), reflecting investment spend in operations/technology/marketing; margin dilution limited by royalty strength but bears watching .
    • Merchandise sales declined to $0.80M (vs $0.93M LY), indicating softness in company-managed merchandise activities even as franchise resale demand remained solid .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Revenue ($USD)$20.12M $19.55M $21.92M $20.42M
Income from Operations ($USD)$13.02M $12.77M $13.60M $13.06M
Net Income ($USD)$10.43M $9.58M $9.96M $10.60M
Diluted EPS ($)$2.85 $2.60 $2.71 $2.89
Operating Margin (%)64.7% (13.02/20.12) 65.3% (12.77/19.55) 62.0% (13.60/21.92) 64.0% (13.06/20.42)
Net Income Margin (%)51.8% (10.43/20.12) 49.0% (9.58/19.55) 45.4% (9.96/21.92) 51.9% (10.60/20.42)
Revenue BreakdownQ2 2024Q2 2025
Royalties ($USD)$17.77M $18.66M
Leasing income ($USD)$0.52M $0.05M
Merchandise sales ($USD)$0.93M $0.80M
Franchise fees ($USD)$0.37M $0.34M
Other ($USD)$0.53M $0.57M
Total Revenue ($USD)$20.12M $20.42M
KPIsQ4 2024Q1 2025Q2 2025
Franchises in operation (units)1,350 1,363 1,371
Awarded but not open (units)79 79 77
Cash & Cash Equivalents ($USD)$12.19M $21.83M $28.77M
Deferred Revenue – Current ($USD)$1.66M $1.67M $1.67M
Deferred Revenue – Long-term ($USD)$8.03M $8.25M $8.33M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareNext payment (Sep 2, 2025)$0.96 (rate set Q1, +$0.06 vs prior) $0.96 (declared Jul 15) Maintained
Revenue/Margins/OpEx/TaxFY/QuarterNo formal guidance provided in available documentsNo formal guidance providedN/A

Note: Management did not issue formal quantitative guidance for revenue, margins, OpEx, OI&E or tax rate in the Q2 materials .

Earnings Call Themes & Trends

Note: A Q2 2025 conference call was scheduled on Jul 15, 2025 at 12:30PM ET; a full transcript was not available in our document sources .

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Technology & innovation“Run-off of leasing portfolio substantially complete” (focus on core resale); investments in the platform indicated Continued “significant investments in operations, technology, marketing and innovation” to strengthen leadership Increasing investment focus
Franchise growth1,350 open units at YE 2024; pipeline of awarded stores 1,371 open units; 77 awarded not open; broad brand strength Positive expansion
Leasing portfolio2024 results impacted by run-off decision (May 2021) Q1 leasing income boosted by litigation settlement ($2.31M); Q2 normalized ($0.05M) Structural wind-down continues
Macro/tariffs/supply chainNot specifically discussed in prior press releases Not discussed in Q2 press release No change (undisclosed)
Governance/Board capabilitiesN/AAdded Macy’s CIO/CTO Keith Credendino to Board (tech depth for retail/franchise systems) Enhanced tech governance

Management Commentary

  • “Sales performance for our franchise partners across all brands increased during the quarter.” — Brett D. Heffes, Chair & CEO .
  • “It is a dynamic time for the resale industry. Winmark has and will continue to make significant investments in operations, technology, marketing and innovation to enhance our leadership position in the industry.” — Brett D. Heffes, Chair & CEO .
  • “The run-off of our leasing portfolio announced in May of 2021 is substantially complete.” — Brett D. Heffes, Chair & CEO (Q1 2025) .

Q&A Highlights

A full earnings call transcript was not available in our sources; no Q&A content could be reviewed. Conference call occurred on Jul 15, 2025 at 12:30PM ET per third-party schedule listing .

Estimates Context

  • Q2 2025 EPS: Actual $2.89 vs Consensus $2.88*; Revenue: Actual $20.42M vs Consensus $20.31M*. Minor beats imply stable execution; estimate revisions likely modest (Values retrieved from S&P Global) .
MetricConsensus (Q2 2025)Actual (Q2 2025)
Primary EPS Consensus Mean ($)$2.88*$2.89
Revenue Consensus Mean ($USD)$20.31M*$20.42M
# of EPS Estimates1*—
# of Revenue Estimates1*—

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue and EPS slightly beat consensus; profitability remains robust, supported by high-margin royalty streams .
  • Leasing is now immaterial and volatile (Q1 settlement, Q2 normalization); core performance should be assessed through royalties and franchise health .
  • Investment in technology/operations is a clear strategic priority; governance refresh adds enterprise retail tech expertise to support system enhancements .
  • Franchise growth is steady (1,371 open, 77 awarded not open), offering visibility into future royalty expansion across multiple brands .
  • Cash position strengthened to $28.77M; consistent dividend at $0.96 per share underscores shareholder returns and balance sheet flexibility .
  • With low estimate coverage (1 estimate), public consensus may under-reflect system momentum; modest beats likely drive limited near-term stock reaction absent incremental catalysts*.
  • Monitor SG&A growth tied to investment cycle and merchandise sales softness; ensure margins remain resilient as spend scales .

*Estimates context values retrieved from S&P Global.