Winmark 2025 Q2 Earnings Slightly Beats Expectations with Net Income Growth

Winmark (WINA) reported its fiscal 2025 Q2 earnings on Jul 15th, 2025. The company announced a net income of $10.6 million, or $2.89 per diluted share, slightly beating analyst estimates of $2.88 per share. The results reflect a continued positive trajectory in the resale industry. Winmark's CEO Brett D. Heffes noted the company’s commitment to investing in operations and innovation to maintain its leadership position. Looking ahead, Winmark anticipates steady growth in sales and franchise development, although with inherent risks and uncertainties.

Revenue

Winmark's total revenue advanced by 1.3% to $19.85 million in 2025 Q2, compared to $19.59 million in 2024 Q2. The royalties segment was particularly strong, contributing $18.66 million, while leasing income added $46,600. Merchandise sales reached $803,600, franchise fees accounted for $338,400, and other income totaled $566,100. Altogether, these segments drove the total revenue to $20.42 million, underscoring the company's diversified income streams.

Earnings/Net Income

Winmark's EPS increased by 1.0% to $3.00 in 2025 Q2, up from $2.97 in 2024 Q2, highlighting continued earnings growth. The company's net income grew by 1.6% to $10.60 million, compared to $10.43 million in the previous year. This performance underscores Winmark's sustained profitability and operational resilience, reflecting positively on its earnings quality.

Post-Earnings Price Action Review

Investors utilizing a strategy of purchasing Winmark shares following revenue increases have seen significant returns. This approach, which involves buying shares after a quarterly financial report showcasing revenue growth and holding for 30 days, has yielded an impressive return of 73.21%. This performance starkly contrasts with the benchmark, which remained at -100.00%, leading to an excess return of 173.21%. The strategy's Compound Annual Growth Rate (CAGR) stood at 20.33%, with no maximum drawdown, although it exhibited relatively high volatility at 30.63%. The Sharpe ratio of 0.66 indicates a favorable risk-adjusted return, showcasing the potential benefits of timing investments around earnings reports.

CEO Commentary

Brett D. Heffes, Chair and Chief Executive Officer, highlighted that sales performance for franchise partners increased during the quarter, reflecting positive momentum in the resale industry. He emphasized that Winmark is committed to making significant investments in operations, technology, marketing, and innovation to strengthen its leadership position in the market.

Guidance

The company anticipates continued growth in sales and franchise development, reinforcing its competitive edge. Winmark expects that ongoing investments will drive future performance, although it acknowledges inherent risks and uncertainties that could impact actual results compared to these projections.

Additional News

In recent weeks, Winmark announced a substantial quarterly cash dividend increase to $0.96 per share, showcasing its commitment to rewarding shareholders. This marks the fifth consecutive year of dividend hikes, reflecting the company's robust cash flow and disciplined capital allocation strategy. Additionally, Winmark has expanded its franchise network, with the awarding of 77 new franchises, further establishing its footprint in the resale industry. The company also declared a special dividend of $7.50 per share, financed using cash reserves, reinforcing its strong financial position and shareholder-centric approach. These strategic moves highlight Winmark's focus on sustainable growth and shareholder value enhancement.