Core Insights - Winmark Corporation (NASDAQ:WINA) is focusing on a strategic shift towards franchising retail stores that sell secondhand goods, with a notable increase in franchise locations from 1,319 to 1,350 by the end of 2024, indicating steady expansion [1] - The company is gradually exiting its leasing segment to enhance margins and align with its long-term strategy, while also emphasizing sustainability and the circular economy [2] - Winmark's strong cash reserves, exceeding $39.7 million in cash and cash equivalents as of Q3 2025, have allowed it to maintain a solid dividend policy, with an operating cash flow of over $36.3 million [3] Financial Performance - Over the past five years, Winmark has consistently raised its dividends at an annual average rate of nearly 36%, and has also issued special dividends, making it a strong candidate for dividend investors [4] - The current quarterly dividend stands at $0.96 per share, with a dividend yield of 0.98% as of October 30 [4]

Core Viewpoint - Winmark Corporation (NASDAQ: WINA) is positioned to perform well in a cost-conscious consumer environment due to its ownership of several thrift shop brands [1] Company Summary - Winmark Corporation operates multiple brands that can be categorized as thrift shops, appealing to shoppers looking to reduce expenses [1] Industry Context - The current retail environment is characterized by consumers seeking to lower their spending, which may benefit companies like Winmark that focus on value-oriented offerings [1]

[Third Quarter and Nine Months 2025 Financial Results Overview](index=1&type=section&id=Third%20Quarter%20and%20Nine%20Months%202025%20Financial%20Results%20Overview) This section provides an overview of Winmark Corporation's financial performance for the third quarter and nine months ended September 27, 2025 [Key Financial Highlights](index=1&type=section&id=1.1%20Key%20Financial%20Highlights) Winmark Corporation announced its third quarter and nine-month financial results for 2025, reporting stable net income for Q3 and an increase for the nine-month period compared to the previous year | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :-------------------- | :------------ | :------------ | :-------------- | :-------------- | | Net Income | $11,136,500 | $11,120,700 | $31,694,200 | $30,371,200 | | Diluted EPS | $3.02 | $3.03 | $8.61 | $8.29 | - Net income for the nine months ended September 27, 2025, increased by **4.36%** year-over-year, and diluted EPS increased by **3.86%** year-over-year[1](index=1&type=chunk) [Company Business Description](index=1&type=section&id=1.2%20Company%20Business%20Description) Winmark Corporation operates as a nationally recognized franchisor in the resale industry, promoting sustainability and small business formation through its five award-winning resale brands - Winmark is a nationally recognized franchisor focused on sustainability and small business formation[2](index=2&type=chunk) - The company operates five resale franchise brands: Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore®, and Music Go Round®[2](index=2&type=chunk) - As of September 27, 2025, there were **1,377** franchises in operation, over **2,800** available territories, and an additional **77** franchises awarded but not yet open[2](index=2&type=chunk) [Forward-Looking Statements](index=1&type=section&id=1.3%20Forward-Looking%20Statements) The press release includes forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially from those anticipated, cautioning investors against undue reliance - The press release contains forward-looking statements as per Section 21E of the Securities Exchange Act of 1934[3](index=3&type=chunk) - These statements are predictions or intentions subject to risks and uncertainties, and actual results could differ materially[3](index=3&type=chunk) - Shareholders and prospective investors are cautioned not to place undue reliance on such statements[3](index=3&type=chunk) [Condensed Financial Statements](index=2&type=section&id=Condensed%20Financial%20Statements) This section presents Winmark Corporation's condensed balance sheets, statements of operations, and cash flows, highlighting key financial positions and performance metrics [Condensed Balance Sheets](index=2&type=section&id=2.1%20Condensed%20Balance%20Sheets) Winmark Corporation's balance sheet as of September 27, 2025, shows a significant increase in total assets, primarily driven by a substantial rise in cash and cash equivalents, and a positive shift in shareholders' equity from a larger deficit to a reduced one | Metric | Sep 27, 2025 | Dec 28, 2024 | | :-------------------------------- | :----------- | :----------- | | Total Assets | $53,747,200 | $26,844,500 | | Cash and cash equivalents | $39,734,800 | $12,189,800 | | Total Current Assets | $43,064,300 | $15,365,600 | | Total Liabilities | $80,088,400 | $77,890,600 | | Total Shareholders' Equity (Deficit) | $(26,341,200) | $(51,046,100) | - Total assets increased by approximately **100%** from December 28, 2024, to September 27, 2025, largely due to a significant increase in cash and cash equivalents[5](index=5&type=chunk) - The shareholders' deficit improved by approximately **48.4%** from $(51,046,100) to $(26,341,200) over the period[7](index=7&type=chunk) [Condensed Statements of Operations](index=3&type=section&id=2.2%20Condensed%20Statements%20of%20Operations) For the nine months ended September 27, 2025, Winmark reported an increase in total revenue and net income, primarily driven by higher royalties, with a slight increase in Q3 revenue and net income year-over-year Three Months Ended September 27, 2025 vs. September 28, 2024 | Metric | Sep 27, 2025 | Sep 28, 2024 | Change | | :------------------------ | :----------- | :----------- | :----- | | Total Revenue | $22,632,900 | $21,510,900 | +5.22% | | Royalties | $20,911,300 | $19,512,500 | +7.17% | | Income from operations | $14,923,200 | $14,928,600 | -0.04% | | Net income | $11,136,500 | $11,120,700 | +0.14% | | Diluted EPS | $3.02 | $3.03 | -0.33% | Nine Months Ended September 27, 2025 vs. September 28, 2024 | Metric | Sep 27, 2025 | Sep 28, 2024 | Change | | :------------------------ | :----------- | :----------- | :----- | | Total Revenue | $64,969,400 | $61,741,100 | +5.23% | | Royalties | $57,348,000 | $54,555,700 | +5.12% | | Income from operations | $41,580,800 | $40,164,400 | +3.53% | | Net income | $31,694,200 | $30,371,200 | +4.36% | | Diluted EPS | $8.61 | $8.29 | +3.86% | - Selling, general and administrative expenses increased for both the three-month period (**+18.9%**) and the nine-month period (**+11.0%**) year-over-year[9](index=9&type=chunk) [Condensed Statements of Cash Flows](index=4&type=section&id=2.3%20Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended September 27, 2025, Winmark experienced a significant net increase in cash, cash equivalents, and restricted cash, primarily driven by strong operating activities cash flow, despite increased dividends paid and common stock repurchases | Metric | 9 Months Ended Sep 27, 2025 | 9 Months Ended Sep 28, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $36,373,800 | $33,700,000 | | Net cash used for investing activities | $(172,700) | $(194,900) | | Net cash used for financing activities | $(8,656,100) | $(9,604,600) | | Net increase in cash, cash equivalents and restricted cash | $27,545,000 | $23,900,500 | | Cash, cash equivalents and restricted cash, end of period | $39,874,800 | $37,287,000 | - Net cash provided by operating activities increased by **7.93%** year-over-year[11](index=11&type=chunk) - Financing activities included **$9,991,400** in dividends paid and **$2,418,700** in common stock repurchases in 2025, partially offset by **$3,754,000** from stock option exercises[11](index=11&type=chunk)

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Points - Winmark Corporation announced a quarterly cash dividend of $0.96 per share, payable on December 1, 2025, to shareholders of record on November 12, 2025 [1] - The company also declared a special dividend of $10.00 per share, totaling approximately $35.6 million, to be paid on the same date and to the same shareholders [2] - Winmark reported net income of $11,136,500 or $3.02 per diluted share for the quarter ended September 27, 2025, slightly down from $11,120,700 or $3.03 per diluted share in 2024 [6] - For the nine months ended September 27, 2025, net income was $31,694,200 or $8.61 per diluted share, compared to $30,371,200 or $8.29 per diluted share for the same period last year [6] - The company has 1,377 franchises in operation and over 2,800 available territories as of September 27, 2025 [3] - Lisa Hake has been appointed as the Chief Marketing Officer, effective October 1, bringing over 25 years of experience [7] - Jenele C. Grassle will not stand for re-election to the Board of Directors at the next Annual Meeting in April 2026, after serving since 2001 [8]

Core Insights - Winmark Corporation announced the appointment of Lisa Hake as Chief Marketing Officer, effective October 1st [1] - Ms. Hake has over 25 years of experience in various marketing roles, including brand management and consumer engagement [1] - The role of Chief Marketing Officer is newly created within the company [1] Company Overview - Winmark Corporation is enhancing its marketing leadership with the addition of Lisa Hake [1] - The company aims to leverage Ms. Hake's extensive experience to drive marketing innovation and franchisee engagement [1]

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[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Winmark Corporation announced an increase in net income and diluted earnings per share for both the second quarter and the first six months of 2025 compared to the prior year periods Net Income and Diluted EPS Performance | Metric | Period | 2025 | 2024 | YoY Change | | :----------------------- | :---------------- | :----------- | :----------- | :----------- | | Net Income | Q2 Ended June 28/29 | $10,601,200 | $10,431,400 | +1.63% | | Diluted EPS | Q2 Ended June 28/29 | $2.89 | $2.85 | +1.40% | | Net Income | Six Months Ended June 28/29 | $20,557,600 | $19,250,400 | +6.79% | | Diluted EPS | Six Months Ended June 28/29 | $5.60 | $5.26 | +6.46% | [Business Overview and Strategic Focus](index=1&type=section&id=Business%20Overview%20and%20Strategic%20Focus) Winmark, a nationally recognized franchisor in the resale industry, reported increased sales performance across its brands and is making significant investments to enhance its market leadership - Sales performance for Winmark's franchise partners across all brands increased during the quarter[3](index=3&type=chunk) - Winmark is making significant investments in operations, technology, marketing, and innovation to enhance its leadership position in the resale industry[3](index=3&type=chunk) - As of June 28, 2025, Winmark had **1,371 franchises in operation**, over **2,800 available territories**, and an additional **77 awarded franchises** not yet open[3](index=3&type=chunk) [Condensed Financial Statements](index=2&type=section&id=Condensed%20Financial%20Statements) [Condensed Balance Sheets](index=2&type=section&id=Condensed%20Balance%20Sheets) Winmark's balance sheet as of June 28, 2025, shows a substantial increase in cash and total current assets, alongside a significant reduction in the shareholders' deficit, compared to December 28, 2024 Selected Balance Sheet Items | Item | June 28, 2025 | December 28, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :------- | | Cash and cash equivalents | $28,765,200 | $12,189,800 | +136.0% | | Total current assets | $32,199,600 | $15,365,600 | +109.6% | | Total assets | $43,172,700 | $26,844,500 | +60.8% | | Total current liabilities | $7,007,200 | $5,087,900 | +37.7% | | Total long-term liabilities | $73,005,400 | $72,802,700 | +0.28% | | Total shareholders' equity (deficit) | $(36,839,900) | $(51,046,100) | +27.8% (reduction in deficit) | [Condensed Statements of Operations](index=3&type=section&id=Condensed%20Statements%20of%20Operations) For the three and six months ended June 28, 2025, Winmark reported an increase in total revenue, primarily driven by royalties, leading to improved income from operations and net income Revenue Breakdown (Three Months Ended) | Revenue Type | June 28, 2025 | June 29, 2024 | YoY Change | | :---------------- | :-------------- | :-------------- | :----------- | | Royalties | $18,662,100 | $17,774,500 | +4.99% | | Leasing income | $46,600 | $524,400 | -91.13% | | Merchandise sales | $803,600 | $925,500 | -13.17% | | Franchise fees | $338,400 | $366,900 | -7.76% | | Other | $566,100 | $529,200 | +6.97% | | **Total revenue** | **$20,416,800** | **$20,120,500** | **+1.47%** | Revenue Breakdown (Six Months Ended) | Revenue Type | June 28, 2025 | June 29, 2024 | YoY Change | | :---------------- | :-------------- | :-------------- | :----------- | | Royalties | $36,436,700 | $35,043,200 | +3.98% | | Leasing income | $2,354,500 | $1,361,200 | +73.0% | | Merchandise sales | $1,744,900 | $2,036,000 | -14.39% | | Franchise fees | $670,400 | $731,500 | -8.35% | | Other | $1,129,900 | $1,058,300 | +6.76% | | **Total revenue** | **$42,336,400** | **$40,230,200** | **+5.24%** | Profitability (Six Months Ended) | Metric | June 28, 2025 | June 29, 2024 | YoY Change | | :----------------------- | :-------------- | :-------------- | :----------- | | Income from operations | $26,657,600 | $25,235,800 | +5.63% | | Net income | $20,557,600 | $19,250,400 | +6.79% | | Diluted EPS | $5.60 | $5.26 | +6.46% | [Condensed Statements of Cash Flows](index=4&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 28, 2025, Winmark experienced an increase in net cash provided by operating activities, while cash used in financing activities also rose due to common stock repurchases and higher dividend payments Cash Flow Activities (Six Months Ended) | Activity | June 28, 2025 | June 29, 2024 | YoY Change | | :----------------------------------- | :-------------- | :-------------- | :----------- | | Net cash provided by operating activities | $24,123,300 | $21,586,000 | +11.75% | | Net cash used for investing activities | $(105,900) | $(190,600) | -44.44% (less cash used) | | Net cash used for financing activities | $(7,417,000) | $(5,384,500) | +37.74% (more cash used) | | Net increase in cash, cash equivalents and restricted cash | $16,600,400 | $16,010,900 | +3.68% | - Key financing activities for the six months ended June 28, 2025, included **$2,418,700 in common stock repurchases** (compared to none in 2024) and **$6,584,600 in dividends paid** (up from $5,963,700 in 2024)[13](index=13&type=chunk)

Core Insights - Younger shoppers are reducing their spending, which negatively impacts Winmark, a retailer known for its thrift stores like Once Upon a Child and Plato's Closet [1][2] Group 1: Consumer Spending Trends - In-store and online purchases for the 18- to 24-year-old demographic fell by 13% year-over-year from January to April, according to market research firm Circana [4] - Factors contributing to this decline include revived student loan payments, a challenging job market, and increased credit card pressures, particularly affecting shoppers under 24 [4] Group 2: Impact on Winmark - The decline in spending is particularly detrimental to Winmark's Plato's Closet brand, which targets tween-to-young-20s shoppers, with apparel spending down 11% and accessories down 18% [5] - Winmark's stock is considered expensive, trading at nearly $380 per share, with a price-to-earnings ratio of about 33 times trailing earnings and 30 times trailing free cash flow [6] - Despite high valuations, Winmark's profits declined last year and are projected to grow only 6% this year and 7% next year, according to S&P Global Market Intelligence [6][7]

Company Overview - Winmark is a leading resale goods franchisor, operating under the brand "The Resale Company" and utilizing a franchise model to extend the life of various items such as toys, clothing, and sports equipment [3] - The company has over 1,300 locations and franchises five store brands: Play It Again Sports, Plato's Closet, Music Go Round, Once Upon A Child, and Style Encore [3] Recent Performance - Winmark's shares declined by 16% this week, with no direct news related to the company identified as the cause [1] - The decline in share price is attributed to the company's stretched valuation and concerns over softening consumer spending [2] Financial Metrics - Since 2000, Winmark has been a significant performer, achieving a 130-bagger return; however, its sales and net income have only grown by 3% and 8% annually over the last decade, respectively [5] - The company's price-to-earnings (P/E) ratio increased from approximately 20 in 2015 to nearly 40 before the recent drop, indicating a disparity between growth and valuation [5] Market Sentiment - Winmark is well-regarded by its franchisees, communities, and customers, which contributes to its status as a core holding for some investors [6] - Despite its strong reputation, the company is currently trading at a high P/E ratio of 34, suggesting that it may require improved consumer spending data to reach new highs [6]