Winmark Corporation Announces Third Quarter Results

Advertising fund revenue was matched by an equal expense, while nine-month earnings and operating cash flow declined year over year.

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MINNEAPOLIS--(BUSINESS WIRE)-- Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 26, 2026 of $11,818,100 or $3.21 per share diluted compared to net income of $11,136,500 or $3.02 per share diluted in 2025. For the nine months ended September 26, 2026, net income was $31,467,700 or $8.51 per share diluted compared to net income of $31,694,200 or $8.61 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.

“During the quarter, Winmark launched the North American Advertising Fund for Plato’s Closet and recently delivered a point-of-sale pilot at one of our franchised locations. Additionally, we have announced North American Advertising Funds for our Once Upon A Child and Play It Again Sports brands for campaigns starting in 2027,” stated Brett D. Heffes, Chair and Chief Executive Officer. “For many years Winmark and our franchisees have underinvested in the marketing necessary to consistently amplify our message across North America. We are taking the appropriate steps to expand awareness of our brands.”

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 September 26, 2026, there were 1,398 franchises in operation and over 2,800 available territories. An additional 79 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 results may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(Unaudited)
		September 26, 2026				December 27, 2025
ASSETS
Current Assets:
Cash and cash equivalents		$	27,964,200			$	10,295,700
Restricted cash			150,000				165,000
Receivables, net			2,253,300				1,483,500
Income tax receivable			—				463,600
Inventories			789,200				362,500
Prepaid expenses			1,447,200				1,325,700
Total current assets			32,603,900				14,096,000
Property and equipment, net			1,214,400				1,219,000
Operating lease right of use asset			1,482,300				1,761,500
Intangible assets, net			2,020,800				2,286,300
Capitalized software			2,272,400				—
Goodwill			607,500				607,500
Other assets			528,500				506,400
Deferred income taxes			4,304,900				4,407,400
		$	45,034,700			$	24,884,100
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		$	1,824,800			$	1,673,900
Income tax payable			100,200				—
Accrued liabilities			6,612,500				2,324,800
Deferred revenue			1,666,900				1,667,300
Total current liabilities			10,204,400				5,666,000
Long-Term Liabilities:
Line of credit/Term loan			30,000,000				30,000,000
Notes payable, net			29,974,700				29,961,000
Deferred revenue			8,447,400				8,350,100
Operating lease liabilities			1,869,500				2,414,200
Other liabilities			1,936,000				2,175,200
Total long-term liabilities			72,227,600				72,900,500
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,559,195 and 3,571,861 shares issued and outstanding			15,181,700				19,612,800
Retained earnings (accumulated deficit)			(52,579,000	)			(73,295,200	)
Total shareholders’ equity (deficit)			(37,397,300	)			(53,682,400	)
		$	45,034,700			$	24,884,100

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended								Nine Months Ended
		September 26, 2026				September 27, 2025				September 26, 2026				September 27, 2025
Revenue:
Royalties		$	21,707,800			$	20,911,300			$	61,087,600			$	57,348,000
North American advertising fund			3,825,300				—				3,825,300				—
Software			497,100				93,100				678,900				278,900
Franchise fees			330,100				417,600				1,092,500				1,088,100
Merchandise sales			1,031,500				693,600				2,544,700				2,438,500
Leasing income			—				46,600				—				2,401,100
Other			498,700				470,700				1,477,200				1,414,800
Total revenue			27,890,500				22,632,900				70,706,200				64,969,400
North American advertising fund expense			3,825,300				—				3,825,300				—
Cost of merchandise sold			947,300				663,300				2,384,200				2,318,100
Selling, general and administrative expenses			7,332,100				7,046,400				22,708,200				21,070,500
Income from operations			15,785,800				14,923,200				41,788,500				41,580,800
Interest expense			(610,300	)			(610,300	)			(1,834,000	)			(1,833,900	)
Interest and other income			242,100				310,300				516,500				714,800
Income before income taxes			15,417,600				14,623,200				40,471,000				40,461,700
Provision for income taxes			(3,599,500	)			(3,486,700	)			(9,003,300	)			(8,767,500	)
Net income		$	11,818,100			$	11,136,500			$	31,467,700			$	31,694,200
Earnings per share - basic		$	3.29			$	3.13			$	8.79			$	8.94
Earnings per share - diluted		$	3.21			$	3.02			$	8.51			$	8.61
Weighted average shares outstanding - basic			3,588,328				3,553,211				3,581,906				3,543,766
Weighted average shares outstanding - diluted			3,685,668				3,693,154				3,697,251				3,679,745

WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
		Nine Months Ended
		September 26, 2026			September 27, 2025
OPERATING ACTIVITIES:
Net income		$	31,467,700		$	31,694,200
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment			281,300			295,500
Amortization of intangible assets			265,500			265,500
Compensation expense related to stock options			1,917,200			1,666,900
Deferred income taxes			102,600			160,100
Operating lease right of use asset amortization			279,200			252,700
Tax benefits on exercised stock options			898,800			1,091,900
Change in operating assets and liabilities:
Receivables			(769,800)			(316,500)
Income tax receivable/payable			(335,000)			(998,500)
Inventories			(426,700)			113,900
Prepaid expenses			(121,600)			(44,500)
Other assets			(22,100)			(5,000)
Accounts payable			150,900			(188,800)
Accrued and other liabilities			1,763,500			2,054,900
Deferred revenue			96,900			331,500
Net cash provided by operating activities			35,548,400			36,373,800
INVESTING ACTIVITIES:
Capitalized software			(2,272,400)			—
Purchase of property and equipment			(276,700)			(172,700)
Net cash used for investing activities			(2,549,100)			(172,700)
FINANCING ACTIVITIES:
Repurchases of common stock			(8,091,600)			(2,418,700)
Proceeds from exercises of stock options			3,497,200			3,754,000
Dividends paid			(10,751,400)			(9,991,400)
Net cash used for financing activities			(15,345,800)			(8,656,100)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			17,653,500			27,545,000
Cash, cash equivalents and restricted cash, beginning of period			10,460,700			12,329,800
Cash, cash equivalents and restricted cash, end of period		$	28,114,200		$	39,874,800
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest		$	1,802,900		$	1,815,500
Cash paid for income taxes		$	8,210,800		$	8,514,100
SUPPLEMENTAL NONCASH FINANCING ACTIVITIES
During the nine months ended September 26, 2026, the Company repurchased $9.85 million of its common stock under its share repurchase program. At September 26, 2026, $1.75 million of such repurchases was included in Accrued liabilities within the Condensed Balance Sheets. Cash payments for repurchased shares during the quarter totaled $8.10 million.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Balance Sheets to the total of the same amounts shown above:
		Nine Months Ended
		September 26, 2026			September 27, 2025
Cash and cash equivalents		$	27,964,200		$	39,734,800
Restricted cash			150,000			140,000
Total cash, cash equivalents and restricted cash		$	28,114,200		$	39,874,800

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261014697520/en/

Anthony D. Ishaug
763/520-8500

Source: Winmark Corporation

Key Terms

point-of-sale technical

The point-of-sale is the place and moment where a customer completes a purchase — think of the checkout counter, card reader, or online checkout page. It includes the hardware and software that record the sale, accept payment, and update inventory and sales records. Investors care because POS systems drive revenue collection, customer data, and operational efficiency; outages, fees, or weak data from POS can directly affect sales, margins and forecasts.

weighted average shares outstanding financial

The weighted average shares outstanding is the average number of a company’s common shares that were available during a reporting period, adjusted so each change (like new shares issued or shares bought back) counts only for the portion of the period it was in effect. Investors use it to calculate per-share measures such as earnings per share, so it shows how ownership dilution or buybacks affect what each share is entitled to—like averaging how many people were at a potluck over time to determine each person’s share of the food.

restricted cash financial

Cash that a company holds but cannot use for day-to-day operations because it is set aside for a specific purpose—such as meeting loan covenants, serving as collateral, funding an escrow, or complying with regulations. Like money in a locked savings account earmarked for a bill, restricted cash reduces the cash available to run the business and pay dividends or debts, so investors treat it differently when assessing a company’s true short-term financial strength.

deferred revenue financial

Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.

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