Winmark Corporation reported first‑quarter 2026 results for the quarter ended March 28, 2026, posting revenue of $20.85 million and net income of $9.25 million, which translates to diluted earnings per share of $2.50.
Revenue was driven by an 8.4% increase in royalty income, which rose to $19.26 million, while merchandise sales fell to $0.65 million. The decline in total revenue reflects the absence of leasing income that had been generated from the company’s equipment‑leasing portfolio, which was fully run‑off in the prior year.
Operating income fell to $12.36 million, a decline from $13.60 million in the same quarter last year, as selling, general and administrative expenses rose to $7.87 million—an increase largely attributable to higher compensation‑related costs. The company’s operating margin contracted to 59.3% from 62.0% year‑over‑year, underscoring the impact of the SG&A increase and the mix shift away from higher‑margin leasing income.
Winmark missed consensus estimates, reporting diluted EPS of $2.50 versus the $2.70 estimate—a miss of $0.20 or 7.4%. Revenue also fell short of the $21.09 million estimate by $0.24 million, a miss of 1.1%.
The company declared a quarterly cash dividend of $1.02 per share, payable in June 2026, and paid a total of $3.43 million in dividends during the quarter. No forward guidance was issued beyond the dividend declaration.
Management highlighted strategic initiatives aimed at strengthening the franchise model: “During the quarter we introduced two significant enhancements to our business model in partnership with our franchisees. We are launching a North American Ad Fund for Plato’s Closet as well as modernizing the point‑of‑sale offering for our franchisees.” The company also noted that it will continue to build a strong foundation in these areas to support its franchisees and enhance its shared business model.
The results illustrate a company that is maintaining robust royalty growth while navigating headwinds from the loss of leasing income and higher operating expenses. The miss on both revenue and EPS signals that the company’s current cost structure and revenue mix are not yet fully aligned with analyst expectations, but the dividend declaration and ongoing investment in franchise support suggest management remains confident in the long‑term viability of its pure‑play franchising model.
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