Winmark (WINA) Q1 2025 earnings summary

Executive summary

• Revenue grew to $21.92 million for Q1 2025, up from $20.11 million in Q1 2024, driven by higher royalties and a one-time leasing income event.

• Net income increased to $10.0 million from $8.8 million year-over-year, with diluted EPS rising to $2.71 from $2.41.

• 1,363 franchise stores were operating at quarter-end, with 33 franchise renewals completed at a 100% renewal rate.

• Q1 results included $2.2 million in leasing income from a customer litigation settlement.

• The leasing portfolio run-off, announced in May 2021, is now substantially complete.

Financial highlights

• Royalties revenue grew to $17.8 million, reflecting additional franchise stores.

• Leasing income surged to $2.3 million from $0.8 million, mainly due to a litigation settlement.

• Merchandise sales declined to $0.9 million from $1.1 million, attributed to lower technology purchases by franchisees.

• Operating income margin was 62.0%, up from 60.8% year-over-year.

• Cash, cash equivalents, and restricted cash totaled $22.0 million at quarter-end.

Outlook and guidance

• Management expects lower leasing income for the remainder of 2025 as the leasing portfolio run-off is substantially complete.

• Cash on hand, operating cash flow, and available credit are expected to fund operations through 2025.

• Forward-looking statements caution that actual results may differ materially due to risks and uncertainties.