Winmark (WINA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $10.4 million ($2.85 per diluted share), nearly flat year-over-year.

• Revenue for Q2 2024 was $20.1 million, down slightly from $20.4 million in Q2 2023.

• Royalties, the largest revenue source, increased due to more franchise stores and higher franchisee sales.

• Leasing income and merchandise sales both declined, reflecting a planned run-off of the leasing portfolio and lower franchisee purchases.

• 1,336 franchises in operation at quarter-end, with 77 more awarded but not yet open.

Financial highlights

• Q2 2024 net income: $10.4 million vs. $10.4 million in Q2 2023; six-month net income: $19.3 million vs. $19.3 million year-over-year.

• Q2 2024 revenue: $20.1 million, down from $20.4 million; six-month revenue: $40.2 million, down from $40.9 million year-over-year.

• Income from operations for Q2 2024 was $13.0 million, down from $13.3 million in Q2 2023.

• Cash and cash equivalents at June 29, 2024 were $29.4 million, up from $13.4 million at year-end 2023.

• Net cash provided by operating activities for six months was $21.6 million, down from $23.2 million year-over-year.

Outlook and guidance

• Management expects leasing income to continue declining as the leasing portfolio runs off.

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

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