Advertisement
UK markets closed
  • NIKKEI 225

    38,946.93
    -122.75 (-0.31%)
     
  • HANG SENG

    19,220.62
    -415.60 (-2.12%)
     
  • CRUDE OIL

    79.06
    -0.74 (-0.93%)
     
  • GOLD FUTURES

    2,425.70
    -12.80 (-0.52%)
     
  • DOW

    39,872.99
    +66.22 (+0.17%)
     
  • Bitcoin GBP

    54,839.89
    -115.27 (-0.21%)
     
  • CMC Crypto 200

    1,512.63
    +24.08 (+1.62%)
     
  • NASDAQ Composite

    16,832.62
    +37.75 (+0.22%)
     
  • UK FTSE All Share

    4,584.40
    -5.98 (-0.13%)
     

Winmark Corp (WINA) Reports Subtle Dip in Quarterly Net Income

  • Net Income: $8,819,000 in Q1 2024, a slight decrease from $8,942,700 in Q1 2023.

  • Earnings Per Share (EPS): Diluted EPS at $2.41, down from $2.49 year-over-year.

  • Revenue: Total revenue stood at $20,109,500, marking a decrease from $20,523,600 in the previous year.

  • Cash and Cash Equivalents: Increased to $22,872,200 from $13,361,500 as of the end of the last fiscal year.

  • Operational Highlights: 1,327 franchises in operation with 73 new franchises awarded but not yet open.

Winmark Corporation (NASDAQ:WINA), a leading franchisor in the resale sector, disclosed its financial results for the first quarter ended March 30, 2024, through its 8-K filing. The company reported a net income of $8,819,000 or $2.41 per diluted share, compared to $8,942,700 or $2.49 per diluted share in the corresponding quarter of the previous year.

Company Overview

Winmark Corp is a renowned franchisor of value-oriented retail store concepts that buy, sell, trade, and consign gently used merchandise. The company primarily operates through its franchising segment, offering strategic consulting services and championing small business formation and sustainability. Winmark's portfolio includes popular resale brands such as Platos Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round.

Financial Performance Analysis

The slight decrease in net income and EPS reflects a modest contraction in overall business performance. Total revenue decreased by approximately $414,100 compared to the same period last year, primarily due to lower merchandise sales and leasing income. However, the company managed to increase its cash reserves significantly, which stands as a testament to its robust cash flow management.

ADVERTISEMENT

Operational challenges include the run-off of the companys leasing portfolio initiated in May 2021, which continues to impact the leasing income stream. Despite these challenges, the company's franchising segment remains strong with an increase in the number of franchises.

Balance Sheet and Cash Flow Highlights

Winmark's balance sheet shows an increase in total assets, from $28,967,700 at the end of the last fiscal year to $38,336,000 as of March 30, 2024. This growth is supported by a significant rise in cash and cash equivalents. The companys approach to maintaining a strong cash position enhances its ability to manage operational needs and invest in growth opportunities.

The cash flow statement further highlights the company's efficient operations, with net cash provided by operating activities amounting to $13,364,000, a slight decrease from the previous year's $13,850,500. This demonstrates Winmark's continued ability to generate cash from its core operations despite the slight revenue dip.

Strategic Outlook and Future Prospects

Looking ahead, Winmark continues to focus on expanding its franchise operations and enhancing its brand portfolio. The strategic decision to run-off the leasing portfolio is expected to streamline operations and focus resources on the more lucrative franchising segment. With a solid financial foundation and a strategic focus on growth areas, Winmark is well-positioned to capitalize on the thriving market for resale retail.

For detailed financial figures and further information, refer to the full 8-K filing.

Explore the complete 8-K earnings release (here) from Winmark Corp for further details.

This article first appeared on GuruFocus.