Winmark (WINA) investor relations material

Executive summary

• Revenue for Q1 2026 was $20.85 million, down from $21.92 million in Q1 2025, primarily due to the completion of the leasing portfolio run-off and lower merchandise sales.

• Net income for Q1 2026 was $9.25 million ($2.50 per diluted share), down from $10.0 million ($2.71 per diluted share) in Q1 2025, which included $2.2 million of one-time leasing income from litigation settlement.

• Royalties increased 8.4% year-over-year to $19.26 million, driven by higher franchise retail sales and more franchise stores.

• All 23 franchise agreements up for renewal in Q1 2026 were renewed, maintaining a 100% renewal rate, with 1,383 franchises in operation and 79 additional franchises awarded but not yet open.

• Two major business model enhancements launched: North American Ad Fund for Plato's Closet and modernization of franchisee point-of-sale systems.

Financial highlights

• Royalties: $19.26 million in Q1 2026, up from $17.77 million in Q1 2025.

• Leasing income dropped to $0.0 million from $2.3 million due to the completed run-off of the leasing portfolio.

• Merchandise sales decreased to $0.7 million from $0.9 million year-over-year.

• Cost of merchandise sold decreased to $618.5K from $888.3K.

• Income from operations was $12.36 million, down from $13.60 million year-over-year.

Outlook and guidance

• Management expects cash on hand, business-generated cash, and the line of credit to be adequate to fund planned operations through 2026.

• Forward-looking statements highlight ongoing reinvestment in marketing, technology, and innovation initiatives for franchisees, and caution that actual results may differ due to various risk factors.