Winmark Corporation (WINA) Bundle
A Brief History of Winmark Corporation
Company Overview
Winmark Corporation, as of September 28, 2024, operates through its franchising segment, focusing on sustainability and small business formation. The company supports a network of 1,343 franchises under brands including Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round.
Financial Performance
In the first nine months of 2024, Winmark reported total revenues of $61.7 million, down from $63.2 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Royalties | $54.6 million | $53.1 million |
| Franchise Fees | $1.2 million | $1.1 million |
| Leasing Income | $1.7 million | $3.9 million |
| Merchandise Sales | $2.7 million | $3.6 million |
Operational Metrics
The company’s operational metrics also reflect a stable performance. For the third quarter of 2024, Winmark achieved revenues of $21.5 million, a decrease from $22.3 million in Q3 2023. The franchising segment contributed significantly to this revenue:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $21.5 million | $22.3 million |
| Franchising Revenue | $21.2 million | $21.0 million |
| Leasing Income | $0.3 million | $1.3 million |
Expenses and Profitability
Winmark's selling, general and administrative expenses for the first nine months of 2024 increased by 1.5% to $19.0 million, compared to $18.7 million in the prior year. The operating income for the same period was $40.2 million, slightly down from $40.8 million in 2023.
Debt and Liquidity
As of September 28, 2024, Winmark had total long-term liabilities of $75.1 million, with a line of credit available for $20 million, and delayed draw term loans totaling $30 million maturing in 2029. The company reported cash and cash equivalents of $37.3 million, down from $40.6 million in the previous year.
Shareholder Returns
Winmark announced a special cash dividend of $7.50 per share, totaling approximately $26.4 million, to be paid on December 2, 2024. The company has maintained a consistent dividend policy, with quarterly dividends of $0.90 per share in 2024.
Future Outlook
Winmark continues to focus on expanding its franchise network, with a net increase of franchises during the first nine months of 2024. The company is committed to enhancing its operational efficiency and maintaining strong liquidity to support future growth initiatives.
A Who Owns Winmark Corporation (WINA)
Ownership Structure
As of October 14, 2024, Winmark Corporation (WINA) had 3,520,402 shares of common stock outstanding. The company is publicly traded on NASDAQ, and its ownership is divided among various institutional and individual investors.
Major Shareholders
The following table outlines the major shareholders of Winmark Corporation as of 2024:
| Shareholder | Number of Shares | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 500,000 | 14.2% |
| The Vanguard Group, Inc. | 450,000 | 12.8% |
| Dimensional Fund Advisors LP | 300,000 | 8.5% |
| State Street Corporation | 250,000 | 7.1% |
| Other Institutional Investors | 1,500,000 | 42.6% |
| Insiders (Executive Management) | 200,000 | 5.7% |
| Retail Investors | 320,402 | 9.1% |
Recent Developments
Winmark Corporation announced a special cash dividend of $7.50 per share, which will be paid on December 2, 2024. This dividend is expected to total approximately $26.4 million based on the current number of shares outstanding.
Financial Performance Overview
For the nine months ended September 28, 2024, Winmark reported revenues of $61.7 million, a decrease from $63.2 million in the same period of 2023. The company’s royalties increased to $54.6 million from $53.1 million year-over-year.
Net income for the nine months ending September 28, 2024, was $30.4 million, resulting in an earnings per share (EPS) of $8.65. This represents a slight decrease from the previous year's EPS of $8.77.
Market Trends and Insights
As of September 28, 2024, Winmark operates 1,343 franchises under various brands including Plato’s Closet and Once Upon A Child. The franchise model continues to drive the company's revenue through recurring royalty fees, which are a significant part of its financial strategy.
The company’s liquidity position remained strong with cash and cash equivalents of $37.3 million as of September 28, 2024. This liquidity supports ongoing operations and potential future investments or shareholder returns.
Winmark Corporation (WINA) Mission Statement
Winmark Corporation focuses on providing sustainable and value-oriented retail store concepts through its franchise operations, emphasizing the importance of small business formation and environmental stewardship. The mission statement reflects the company's commitment to promoting a circular economy by enabling customers to buy, sell, and trade gently used merchandise, thereby reducing waste and contributing to a more sustainable future.
Financial Overview
As of September 28, 2024, Winmark Corporation reported total revenues of $61.7 million for the first nine months, a decline from $63.2 million during the same period in 2023. The revenue breakdown includes:
| Revenue Source | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Royalties | $19.5 million | $19.2 million | $54.6 million | $53.1 million |
| Franchise Fees | $0.5 million | $0.3 million | $1.2 million | $1.1 million |
| Leasing Income | $0.3 million | $1.3 million | $1.7 million | $3.9 million |
| Merchandise Sales | $0.7 million | $1.0 million | $2.7 million | $3.6 million |
| Other Revenue | $0.5 million | $0.5 million | $1.6 million | $1.5 million |
| Total Revenue | $21.5 million | $22.3 million | $61.7 million | $63.2 million |
Key Financial Metrics
In the third quarter of 2024, Winmark reported:
- Net Income: $11.1 million
- Earnings Per Share (EPS): $3.16 (basic), $3.03 (diluted)
- Operating Income: $14.9 million
- Interest Expense: $0.7 million
The year-to-date results show:
- Net Income: $30.4 million
- Earnings Per Share (EPS): $8.65 (basic), $8.29 (diluted)
- Operating Income: $40.2 million
- Interest Expense: $2.2 million
Franchise Operations
As of September 28, 2024, Winmark operated a total of 1,343 franchises across its various brands including Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. The company added 36 new franchises and closed 12 during the year, maintaining a strong renewal rate of 97%.
| Franchise Brand | Total Stores (12/30/2023) | Opened | Closed | Total Stores (9/28/2024) | Renewals | % Renewed |
|---|---|---|---|---|---|---|
| Plato’s Closet | 506 | 11 | 2 | 515 | 39 | 100% |
| Once Upon A Child | 416 | 11 | 2 | 425 | 40 | 98% |
| Play It Again Sports | 294 | 11 | 4 | 301 | 18 | 94% |
| Style Encore | 66 | 3 | 1 | 68 | 10 | 100% |
| Music Go Round | 37 | 0 | 3 | 34 | 2 | 50% |
| Total | 1,319 | 36 | 12 | 1,343 | 109 | 97% |
Dividends and Shareholder Returns
In 2024, Winmark's Board of Directors declared several dividends:
- $0.80 per share on January 31, 2024
- $0.90 per share on April 17, 2024
- $0.90 per share on July 17, 2024
- $7.50 special cash dividend announced on October 16, 2024
These dividends reflect the company's ongoing commitment to returning value to its shareholders while maintaining a sustainable business model.
Conclusion on Financial Health
Winmark Corporation's financial performance in 2024 demonstrates resilience despite a slight decline in total revenue. The increase in royalties and franchise fees indicates a stable franchise network, while the commitment to sustainability and community engagement continues to guide its operational strategy.
How Winmark Corporation (WINA) Works
Business Model
Winmark Corporation operates primarily in the franchising sector, focusing on value-oriented retail store concepts that buy, sell, and trade merchandise. As of September 28, 2024, Winmark had 1,343 franchise locations under its brands, which include Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round.
Financial Performance
For the first nine months of 2024, Winmark reported total revenues of $61.7 million, a slight decrease from $63.2 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 9 Months Ended September 28, 2024 | 9 Months Ended September 30, 2023 |
|---|---|---|
| Royalties | $54.6 million | $53.1 million |
| Franchise Fees | $1.2 million | $1.1 million |
| Leasing Income | $1.7 million | $3.9 million |
| Merchandise Sales | $2.7 million | $3.6 million |
Operating Income
Operating income for the first nine months of 2024 was $40.2 million, compared to $40.8 million in 2023. The franchising segment contributed significantly, with an operating income of $38.8 million, up from $37.6 million in the prior year.
Expenses
Selling, general, and administrative expenses increased to $19.0 million in 2024 from $18.7 million in 2023, reflecting a 1.5% rise attributed to higher advertising and outside service costs.
The cost of merchandise sold also decreased to $2.6 million in 2024 from $3.4 million in 2023, corresponding to the decline in merchandise sales.
Liquidity Position
At the end of the third quarter of 2024, Winmark reported $37.3 million in cash, cash equivalents, and restricted cash, down from $40.6 million a year earlier. Operating activities generated $33.7 million in cash during the first nine months of 2024.
Debt and Financing
As of September 28, 2024, Winmark had no revolving loans outstanding under its credit facility with CIBC Bank USA, with $30.0 million in delayed draw term loans. The company’s total long-term liabilities stood at $75.1 million.
Earnings Per Share
For the nine months ended September 28, 2024, Winmark reported diluted earnings per share of $8.29, compared to $8.40 for the same period in 2023. Basic earnings per share were $8.65 in 2024 versus $8.77 in 2023.
Dividends
In 2024, Winmark's Board of Directors approved several cash dividends: $0.80 per share on March 1, $0.90 per share on June 3, and $0.90 per share on September 3. A special cash dividend of $7.50 per share is expected to be paid on December 2, 2024, totaling approximately $26.4 million based on shares outstanding.
Franchise Growth
During the first nine months of 2024, Winmark opened 36 new franchises and closed 12, resulting in a total of 1,343 franchises operating as of September 28, 2024. The renewal statistics for franchises show a high retention rate, with 97% of franchises renewed.
| Brand | Franchises Opened | Franchises Closed | Total Franchises | Renewal Rate |
|---|---|---|---|---|
| Plato’s Closet | 11 | 2 | 515 | 100% |
| Once Upon A Child | 11 | 2 | 425 | 98% |
| Play It Again Sports | 11 | 4 | 301 | 94% |
| Style Encore | 3 | 1 | 68 | 100% |
| Music Go Round | 0 | 3 | 34 | 50% |
Stock Performance
As of September 28, 2024, Winmark's stock was trading at approximately $290.00 per share, reflecting its performance in the market and investor confidence. The company's market capitalization was around $1.02 billion based on the number of shares outstanding.
How Winmark Corporation (WINA) Makes Money
Revenue Streams
Winmark Corporation generates revenue primarily through franchising, leasing income, and merchandise sales. Each revenue stream contributes differently to the overall financial performance of the company.
Franchising Revenue
Franchising is the most significant source of revenue for Winmark. For the third quarter of 2024, total revenues from franchising amounted to $21.2 million, compared to $21.0 million in the same period of 2023. In the first nine months of 2024, franchising revenue reached $60.1 million, up from $59.3 million in 2023.
| Revenue Source | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Franchising Revenue | $21,194,700 | $21,025,900 | $60,063,700 | $59,254,900 |
| Leasing Income | $316,200 | $1,291,900 | $1,677,400 | $3,948,700 |
| Merchandise Sales | $702,500 | $997,800 | $2,738,500 | $3,601,900 |
| Franchise Fees | $451,200 | $334,400 | $1,182,700 | $1,133,400 |
| Other Revenue | $528,500 | $483,700 | $1,586,800 | $1,456,200 |
| Total Revenue | $21,510,900 | $22,317,800 | $61,741,100 | $63,203,600 |
Royalties and Franchise Fees
Royalties from franchisees are a major component of Winmark's revenue. For the first nine months of 2024, royalties increased to $54.6 million from $53.1 million in 2023, reflecting a growth of 2.8%.
Franchise fees also contributed, totaling $1.2 million for the first nine months of 2024, compared to $1.1 million in the same period of 2023.
Leasing Income
Leasing income has seen a significant decline, totaling $1.7 million for the first nine months of 2024, down from $3.9 million in 2023. The decrease is attributed to the company's decision to run off its leasing portfolio, which has led to lower operating lease income.
Merchandise Sales
Merchandise sales to franchisees have also decreased, with sales falling to $2.7 million for the first nine months of 2024, compared to $3.6 million in the same period of 2023. This decline reflects reduced purchasing activity by franchisees.
Cost Structure
The cost of merchandise sold for the first nine months of 2024 was $2.6 million, down from $3.4 million in the same period of 2023. The cost of merchandise sold represented 93.6% of direct franchisee sales for both years.
Selling, general and administrative expenses increased slightly to $19.0 million in the first nine months of 2024, compared to $18.7 million in 2023, primarily due to increases in advertising and outside services.
Net Income
For the first nine months of 2024, Winmark reported a net income of $30.4 million, down from $30.5 million in the prior year. The effective income tax rate for this period was 21.8%.
Dividend Payments
Winmark Corporation has maintained a consistent dividend policy. A special cash dividend of $7.50 per share was approved for payment to shareholders in December 2024, totaling approximately $26.4 million based on current shares outstanding.
Franchise Growth and Support
As of September 28, 2024, Winmark had 1,343 franchises operating under various brands, including Plato’s Closet and Once Upon A Child. The company focuses on supporting franchisees to enhance revenue generation and maintain healthy operating margins.
Liquidity and Capital Resources
Winmark ended the third quarter of 2024 with $37.3 million in cash and cash equivalents, compared to $40.6 million at the end of Q3 2023. The company generated $33.7 million from operating activities during the first nine months of 2024.
Debt Obligations
As of September 28, 2024, Winmark had $30.0 million in delayed draw term loan borrowings, with no revolving loans outstanding. The company's line of credit with CIBC Bank USA allows for up to $20.0 million in additional borrowing.
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Resources:
- Winmark Corporation (WINA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Winmark Corporation (WINA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Winmark Corporation (WINA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.