WINMARK CORPORATION'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 2025
WINMARK CORPORATION'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 2025
Winmark Corporation, a Minnesota-based company, reported its quarterly financial results for the period ended September 27, 2025. The company’s consolidated condensed balance sheet as of September 27, 2025, showed total assets of $123.1 million, total liabilities of $64.4 million, and total shareholders’ equity of $58.7 million. For the three months ended September 27, 2025, the company reported net income of $2.3 million, or $0.65 per diluted share, compared to net income of $1.9 million, or $0.53 per diluted share, for the same period in the prior year. For the nine months ended September 27, 2025, the company reported net income of $6.5 million, or $1.83 per diluted share, compared to net income of $5.3 million, or $1.49 per diluted share, for the same period in the prior year. The company’s revenue for the three months ended September 27, 2025, was $23.4 million, compared to $21.1 million for the same period in the prior year.
Financial Performance Overview
The company’s financial report for the three and nine months ended September 27, 2025 shows a solid performance with revenue and profit growth compared to the same periods in the previous year.
Revenue Trends The company’s total revenue for the third quarter of 2025 was $22.6 million, up from $21.5 million in the same quarter of 2024, a 5.1% increase. For the first nine months of 2025, total revenue was $65.0 million, up from $61.7 million in the same period of 2024, a 5.3% increase.
The key drivers of revenue growth were:
- Royalties increased 7.2% in Q3 2025 and 5.1% in the first 9 months of 2025, due to higher franchise retail sales and additional franchise stores.
- Leasing income decreased in Q3 2025 due to the portfolio runoff, but increased 41.2% in the first 9 months of 2025 due to the settlement of customer litigation.
- Merchandise sales to franchisees were flat in Q3 2025 but decreased 11.1% in the first 9 months of 2025 due to lower technology purchases.
Profitability The company’s operating income from the franchising segment increased 0.7% in Q3 2025 and 1.3% in the first 9 months of 2025, driven by higher royalty revenues. Income from the other operating segment decreased in Q3 2025 but increased 76.9% in the first 9 months of 2025 due to the leasing income settlement.
Overall, the company’s net income and cash flow from operations increased compared to the prior year periods, aided by lower interest expense. The company maintained a strong liquidity position with $39.9 million in cash and cash equivalents as of September 27, 2025.
Strengths and Weaknesses The company’s key strengths include its franchise model, which generates stable royalty income, and its ability to manage costs and debt levels. The decrease in leasing income and merchandise sales to franchisees represent potential weaknesses that the company will need to monitor.
Outlook The company expects to continue generating sufficient cash flow from operations and available credit facilities to fund its planned operations through 2026. However, its ability to meet debt obligations and fund future growth could be impacted by macroeconomic factors and industry conditions, as noted in the forward-looking statements.
Overall, the company appears to be in a solid financial position, with opportunities to further grow its franchise business and manage its other operations effectively.