Winmark Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 15 July 2026: press release. The quarter’s numbers.

Key takeaways

Net income and diluted EPS declined: Quarter net income was $10,394,800, or $2.81 diluted EPS, against $10,601,200 or $2.89 a year earlier. Six-month net income was $19,649,600, or $5.31 diluted, against $20,557,600 or $5.60. Source
Prior-year settlement income not repeated: The 2025 year-to-date results included $2.2 million of leasing income from a customer litigation settlement. The 2026 statements show no leasing income in either period. Source
Royalties drove the revenue increase: Royalties were $20,117,000 against $18,662,100 for the quarter, and $39,379,800 against $36,436,700 for six months. Leasing income was nil in 2026 and $46,600 for the quarter in 2025. Source
SG&A expenses rose year over year: SG&A expenses were $7,506,400 against $6,589,200 for the quarter, and $15,376,000 against $14,024,000 for six months. The release gives no reason for the change. Source
Franchise count rose to 1,389: At June 27, 2026 there were 1,389 franchises in operation, up from 1,383 at March 28, 2026. An additional 87 franchises were awarded but not open, up from 79. Source
Cash balance rose sharply: Cash and cash equivalents were $25,834,500 at June 27, 2026, against $10,295,700 at December 27, 2025. Restricted cash was $150,000 against $165,000. Source
No repurchases; dividends higher: The cash flow statement shows no repurchases of common stock in 2026, against $2,418,700 in the 2025 column. Dividends paid were $7,087,400 against $6,584,600 in the 2025 column. Source
Ad fund and technology investment: Management said the company has continued to invest ahead of the Plato’s Closet North American Ad Fund launch and in technology and innovation initiatives across its network. Source

“Winmark has continued to make investments in advance of the Plato’s Closet North American Ad Fund launch and in support of technology and innovation initiatives across our network”
Brett D. Heffes, Chair and Chief Executive Officer

Results and growth drivers

Net income and diluted EPS declined: Quarter net income was $10,394,800, or $2.81 diluted EPS, against $10,601,200 or $2.89 a year earlier. Six-month net income was $19,649,600, or $5.31 diluted, against $20,557,600 or $5.60. Source
Prior-year settlement income not repeated: The 2025 year-to-date results included $2.2 million of leasing income from a customer litigation settlement. The 2026 statements show no leasing income in either period. Source
Total revenue rose for the quarter: Total revenue was $21,966,000 against $20,416,800 for the quarter, and $42,815,700 against $42,336,400 for six months. Source
Operating income higher for the quarter: Income from operations was $13,641,100 against $13,061,100 for the quarter. Six-month income from operations was $26,002,700 against $26,657,600, when the 2025 period included the settlement income. Source

Revenue streams

Royalties drove the revenue increase: Royalties were $20,117,000 against $18,662,100 for the quarter, and $39,379,800 against $36,436,700 for six months. Leasing income was nil in 2026 and $46,600 for the quarter in 2025. Source
Franchise fees rose year over year: Franchise fees were $419,500 against $338,400 for the quarter, and $762,400 against $670,400 for six months. Other revenue was $570,200 against $566,100 for the quarter. Source
Merchandise sales up for the quarter: Merchandise sales were $859,300 against $803,600 for the quarter, while six-month merchandise sales were $1,513,200 against $1,744,900. Source

Costs and operating expenses

SG&A expenses rose year over year: SG&A expenses were $7,506,400 against $6,589,200 for the quarter, and $15,376,000 against $14,024,000 for six months. The release gives no reason for the change. Source
Cost of merchandise sold moved lower: Cost of merchandise sold was $818,500 against $766,500 for the quarter, and $1,437,000 against $1,654,800 for six months. Source
Interest expense flat, other income lower: Interest expense was $609,800 in both quarters. Interest and other income was $155,600 against $254,600 for the quarter. Source
Tax provision higher for the quarter: Provision for income taxes was $2,792,100 against $2,104,700 for the quarter; the documents give no reason for the change. Source

Franchise network

Franchise count rose to 1,389: At June 27, 2026 there were 1,389 franchises in operation, up from 1,383 at March 28, 2026. An additional 87 franchises were awarded but not open, up from 79. Source
Five resale franchise brands: The company lists five resale franchise brands: Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round. Source
Self-description as franchisor: The company describes itself as a nationally recognized franchisor focused on sustainability and small business formation. Source

Cash, balance sheet and shareholder returns

Cash balance rose sharply: Cash and cash equivalents were $25,834,500 at June 27, 2026, against $10,295,700 at December 27, 2025. Restricted cash was $150,000 against $165,000. Source
No repurchases; dividends higher: The cash flow statement shows no repurchases of common stock in 2026, against $2,418,700 in the 2025 column. Dividends paid were $7,087,400 against $6,584,600 in the 2025 column. Source
Operating cash flow lower: Net cash provided by operating activities was $22,607,100 against $24,123,300 in the 2025 column. Source
Debt balances unchanged: Line of credit/term loan remained $30,000,000. Notes payable, net was $29,970,200 at June 27, 2026, against $29,961,000 at December 27, 2025. Source
Shareholder deficit narrowed: Total shareholders’ equity was a deficit of $37,622,700, against $53,682,400 at December 27, 2025. Retained earnings (accumulated deficit) improved to $(60,733,100) from $(73,295,200). Source
Cash flow column heading mismatch: The cash flow statement column is headed Three Months Ended, but its net income of $19,649,600 matches the six-month figure in the statement of operations. Source

Investment and technology spending

Ad fund and technology investment: Management said the company has continued to invest ahead of the Plato’s Closet North American Ad Fund launch and in technology and innovation initiatives across its network. Source
Capitalized software recorded this period: Capitalized software is $2,210,300 at June 27, 2026, against no balance at December 27, 2025. The cash flow statement shows the same amount as an investing outflow. Source
Property purchases were small: Purchase of property and equipment was $54,900 against $105,900 in the 2025 column. Source

Coming up, as management said on 15 July 2026

Plato’s Closet Ad Fund launch ahead: Management said spending continues in advance of the North American Ad Fund launch for Plato’s Closet. No launch date is given in the release. Source

Figures management reported

Figure	Reported
Franchises in operation Source	1,389
Franchises awarded, not open Source	87
Inventories Source	$656,900

Earlier plans management reported on

Not stated: Management refers to investments made in advance of the Ad Fund launch, which the prior release described as underway. No status is given for the launch itself. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

763/520-8500

WINMARK CORPORATION ANNOUNCES

SECOND QUARTER RESULTS

Minneapolis, MN (July 15, 2026) - Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended June 27, 2026 of $10,394,800 or $2.81 per share diluted compared to net income of $10,601,200 or $2.89 per share diluted in 2025. For the six months ended June 27, 2026, net income was $19,649,600 or $5.31 per share diluted compared to net income of $20,557,600 or $5.60 per share diluted for the same period last year. 2025 year-to-date results included $2.2 million of leasing income from the settlement of customer litigation.

“Winmark has continued to make investments in advance of the Plato’s Closet North American Ad Fund launch and in support of technology and innovation initiatives across our network,” noted Brett D. Heffes, Chair and Chief Executive Officer

Winmark - the Resale Company®, is a nationally recognized franchisor focused on sustainability and small business formation. We champion and guide entrepreneurs interested in operating one of our award winning resale franchises: Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. At June 27, 2026, there were 1,389 franchises in operation and over 2,800 available territories. An additional 87 franchises have been awarded but are not open.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

WINMARK CORPORATION

CONDENSED BALANCE SHEETS

	June 27, 2026	December 27, 2025
ASSETS
Current Assets:
Cash and cash equivalents	$25,834,500	$10,295,700
Restricted cash	150,000	165,000
Receivables, net	1,843,400	1,483,500
Income tax receivable	436,800	463,600
Inventories	656,900	362,500
Prepaid expenses	1,846,100	1,325,700
Total current assets	30,767,700	14,096,000
Property and equipment, net	1,086,300	1,219,000
Operating lease right of use asset	1,577,700	1,761,500
Intangible assets, net	2,109,300	2,286,300
Capitalized software	2,210,300	-
Goodwill	607,500	607,500
Other assets	526,600	506,400
Deferred income taxes	4,304,800	4,407,400
	$43,190,200	$24,884,100
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$2,113,100	$1,673,900
Accrued liabilities	4,422,500	2,324,800
Deferred revenue	1,669,100	1,667,300
Total current liabilities	8,204,700	5,666,000
Long-Term Liabilities:
Line of credit/Term loan	30,000,000	30,000,000
Notes payable, net	29,970,200	29,961,000
Deferred revenue	8,417,400	8,350,100
Operating lease liabilities	2,054,800	2,414,200
Other liabilities	2,165,800	2,175,200
Total long-term liabilities	72,608,200	72,900,500
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,587,079 and 3,571,861 shares issued and outstanding	23,110,400	19,612,800
Retained earnings (accumulated deficit)	(60,733,100)	(73,295,200)
Total shareholders’ equity (deficit)	(37,622,700)	(53,682,400)
	$43,190,200	$24,884,100

Winmark Corporation

CONDENSED STATEMENTS OF OPERATIONS

	Three Months Ended		Six Months Ended
	June 27, 2026	June 28, 2025	June 27, 2026	June 28, 2025
Revenue:
Royalties	$20,117,000	$18,662,100	$39,379,800	$36,436,700
Leasing income	-	46,600	-	2,354,500
Merchandise sales	859,300	803,600	1,513,200	1,744,900
Franchise fees	419,500	338,400	762,400	670,400
Other	570,200	566,100	1,160,300	1,129,900
Total revenue	21,966,000	20,416,800	42,815,700	42,336,400
Cost of merchandise sold	818,500	766,500	1,437,000	1,654,800
Selling, general and administrative expenses	7,506,400	6,589,200	15,376,000	14,024,000
Income from operations	13,641,100	13,061,100	26,002,700	26,657,600
Interest expense	(609,800)	(609,800)	(1,223,700)	(1,223,600)
Interest and other income	155,600	254,600	274,400	404,400
Income before income taxes	13,186,900	12,705,900	25,053,400	25,838,400
Provision for income taxes	(2,792,100)	(2,104,700)	(5,403,800)	(5,280,800)
Net income	$10,394,800	$10,601,200	$19,649,600	$20,557,600
Earnings per share - basic	$2.90	$3.00	$5.49	$5.81
Earnings per share - diluted	$2.81	$2.89	$5.31	$5.60
Weighted average shares outstanding - basic	3,582,087	3,539,437	3,577,169	3,539,042
Weighted average shares outstanding - diluted	3,696,010	3,673,135	3,701,516	3,673,039

Winmark Corporation

CONDENSED STATEMENTS OF CASH FLOWS

	Three Months Ended
	June 27, 2026	June 28, 2025
OPERATING ACTIVITIES:
Net income	$19,649,600	$20,557,600
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	187,600	196,300
Amortization of intangible assets	177,000	177,000
Compensation expense related to stock options	1,228,300	1,065,600
Deferred income taxes	102,600	86,400
Operating lease right of use asset amortization	183,800	166,400
Tax benefits on exercised stock options	742,800	971,200
Change in operating assets and liabilities:
Receivables	(359,900)	(371,500)
Income tax receivable/payable	(716,000)	(1,341,400)
Inventories	(294,400)	35,500
Prepaid expenses	(520,400)	472,500
Other assets	(20,200)	(14,300)
Accounts payable	439,200	(371,700)
Accrued and other liabilities	1,737,900	2,178,000
Deferred revenue	69,200	315,700
Net cash provided by operating activities	22,607,100	24,123,300
INVESTING ACTIVITIES:
Capitalized software	(2,210,300)	-
Purchase of property and equipment	(54,900)	(105,900)
Net cash used for investing activities	(2,265,200)	(105,900)
FINANCING ACTIVITIES:
Repurchases of common stock	-	(2,418,700)
Proceeds from exercises of stock options	2,269,300	1,586,300
Dividends paid	(7,087,400)	(6,584,600)
Net cash used for financing activities	(4,818,100)	(7,417,000)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	15,523,800	16,600,400
Cash, cash equivalents and restricted cash, beginning of period	10,460,700	12,329,800
Cash, cash equivalents and restricted cash, end of period	$25,984,500	$28,930,200
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$1,207,800	$1,207,800
Cash paid for income taxes	$5,253,000	$5,368,500
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Condensed Balance Sheets to the total of the same amounts shown above:
	Six Months Ended
	June 27, 2026	June 28, 2025
Cash and cash equivalents	$25,834,500	$28,765,200
Restricted cash	150,000	165,000
Total cash, cash equivalents and restricted cash	$25,984,500	$28,930,200

Contacts
Anthony D. Ishaug