Winmark Corp Net Income Slips 7% to $9.3M Despite Revenue Decline in Q1 2026

Winmark Corp (NASDAQ: WINA), a franchisor of resale and recycling retail brands, reported net income of $9.25 million for the three months ended March 28, 2026, a 7% decline from $9.96 million in the same period a year earlier. The drop came as total revenue fell to $20.85 million from $21.92 million, marking a 4.9% year-over-year decrease. Read more earnings reports.

The revenue decline was driven in part by the absence of leasing income in the current quarter. The company reported no leasing income for the first quarter of fiscal 2026, compared to $2.31 million a year earlier. Royalties, the company's largest revenue stream, climbed 8.4% to $19.26 million from $17.77 million. Merchandise sales fell 30.5% to $653,900 from $941,300.

Income from operations dropped 9.1% to $12.36 million from $13.60 million. The company's operating margin contracted to 59.3% from 62.0% a year earlier. Selling, general and administrative expenses rose 5.8% to $7.87 million from $7.43 million, representing 37.7% of revenue compared to 33.9% in the prior-year period.

Interest expense held steady at $613,900 in both periods. The provision for income taxes totaled $2.61 million, down from $3.18 million a year earlier, as pre-tax income declined to $11.87 million from $13.13 million.

Earnings per share on a diluted basis came in at $2.50, down from $2.71 a year earlier. Basic earnings per share declined to $2.59 from $2.81. The weighted average diluted share count rose to 3.71 million shares from 3.67 million.

Cash and cash equivalents nearly doubled to $19.83 million at March 28, 2026, from $10.30 million at December 27, 2025. The company generated $11.88 million in operating cash flow during the quarter, down from $15.08 million a year earlier. Winmark paid $3.43 million in dividends, or $0.96 per share, compared to $3.19 million, or $0.90 per share, in the prior-year quarter.

The company maintained $30 million in long-term debt on its balance sheet, unchanged from the prior quarter-end. Total shareholders' deficit narrowed to $46.21 million from $53.68 million at December 27, 2025, reflecting the quarter's earnings partially offset by dividend payments.