Breaking Down Winmark Corporation (WINA) Financial Health: Key Insights for Investors

Are you looking for a stable investment in a unique franchise model? Have you considered Winmark Corporation? Despite a minor dip in net income from $40.18 million in 2023 to $39.95 million in 2024, and a slight revenue decrease from $83.24 million to $81.29 million, Winmark remains a compelling option. With a franchise network of 1,363 locations and a recent increase in its quarterly dividend to $0.96 per share, could Winmark be the sustainable investment you've been searching for? Let's dive into the key financial insights that can help you make an informed decision.

Winmark Corporation (WINA) Revenue Analysis

Winmark Corporation primarily generates revenue through franchising and leasing activities. The company operates through several segments, including franchising, leasing, and related products. As of the fiscal year 2024, a significant portion of Winmark's revenue comes from franchise royalties, which are based on the sales of its franchisees, and leasing revenue from Winmark Capital Corporation.

Analyzing Winmark Corporation's revenue streams involves looking at the performance of its different business segments. Franchise royalties typically form a substantial part of the total revenue. Additionally, the leasing segment contributes through interest income and lease payments received. Understanding the dynamics within these segments is crucial for assessing the company's financial health.

Year-over-year revenue growth provides insights into Winmark's performance. Examining historical trends helps determine whether the company is experiencing growth, stagnation, or decline. The percentage increase or decrease in revenue from one year to the next is a key indicator of its business trajectory. For example, consistent growth in franchise royalties indicates a strong and expanding franchisee network.

The contribution of different business segments to overall revenue highlights the areas where Winmark excels. If franchising contributes the most, it signals the strength of Winmark's brand and franchise system. Conversely, if leasing revenue dominates, it reflects the effectiveness of Winmark Capital Corporation's operations. Analyzing these contributions helps identify key drivers of revenue and potential areas for improvement.

Significant changes in revenue streams warrant close attention. These could result from various factors, such as economic conditions, shifts in consumer behavior, or strategic decisions made by Winmark. For instance, a decline in franchise royalties might indicate challenges within the franchisee network, while growth in leasing revenue could signal increased demand for financing solutions. Monitoring these changes helps investors and analysts understand the evolving dynamics of Winmark's business.

Here are some factors that can influence Winmark's revenue streams:

• Franchise Performance: The sales performance of individual franchisees significantly impacts royalty revenue.
• Leasing Operations: The volume and terms of leasing agreements managed by Winmark Capital Corporation drive leasing revenue.
• Economic Conditions: Overall economic health affects consumer spending and demand for leasing services.
• Strategic Initiatives: New business strategies or market expansions can lead to changes in revenue streams.

To provide a clearer picture, consider the following hypothetical revenue breakdown for Winmark Corporation based on 2024 fiscal year data:

This breakdown illustrates that franchise royalties and leasing revenue are the primary drivers of Winmark's overall revenue. Any shift in these percentages could indicate significant changes in the company's business model or market conditions.

Winmark Corporation (WINA) Profitability Metrics

Analyzing Winmark Corporation's profitability involves examining its gross profit, operating profit, and net profit margins, alongside trends and comparisons with industry averages. This assessment reveals the company's efficiency in managing costs and generating profit from its revenue.

For the fiscal year 2024, Winmark Corporation reported the following:

• Gross Profit: Winmark's gross profit for 2024 stood at $131.45 million.
• Operating Income: The operating income reached $74.88 million for the same period.
• Net Income: The net income available to common shareholders was $50.87 million.

Here's a more detailed breakdown of Winmark's profitability metrics:

Gross Profit Margin:

Winmark's gross profit margin for 2024 was approximately 74.75%. This high margin indicates effective cost management relative to revenue.

Operating Profit Margin:

The operating profit margin for 2024 was 42.53%, showcasing the company's ability to manage operating expenses while maintaining profitability.

Net Profit Margin:

Winmark's net profit margin in 2024 was 28.91%. This figure reflects the percentage of revenue that translates into profit after all expenses, including taxes, are considered.

To provide a clearer picture, here's a table summarizing Winmark's profitability metrics for 2024:

When evaluating operational efficiency, several factors are crucial. Effective cost management is evident in Winmark's ability to maintain a high gross profit margin. Gross margin trends indicate the company's pricing strategy and cost control effectiveness over time. Consistent or increasing gross margins suggest strong operational management.

Further insights into Winmark Corporation and its investors can be found here: Exploring Winmark Corporation (WINA) Investor Profile: Who’s Buying and Why?

Winmark Corporation (WINA) Debt vs. Equity Structure

Understanding how Winmark Corporation (WINA) finances its growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial strategy and risk profile. Let's delve into Winmark's debt levels, ratios, and financing activities.

Winmark Corporation's approach to financing its operations involves a mix of debt and equity. As of the fiscal year 2024, it's important to evaluate the specifics of their debt structure to understand their financial leverage. Here’s a breakdown:

• Overview of Debt Levels: Winmark maintains both short-term and long-term debt. Analyzing these figures provides a clear picture of their immediate and future obligations.
• Debt-to-Equity Ratio: This ratio is a key indicator of financial risk. It shows the proportion of debt Winmark uses to finance its assets relative to the value of shareholders' equity. A comparison against industry standards helps contextualize whether Winmark's ratio is conservative or aggressive.
• Recent Debt Activities: Monitoring any recent debt issuances, credit ratings, or refinancing activities offers insight into how Winmark manages its debt and its perceived creditworthiness in the financial markets.
• Balance Between Debt and Equity: The strategic decision to fund growth through debt versus equity affects earnings per share and return on equity. Understanding this balance is crucial for assessing long-term financial health.

While specific figures fluctuate and are dependent on the reporting period, investors can typically find details in Winmark's financial statements, particularly the balance sheet and footnotes, as well as in their filings with the Securities and Exchange Commission (SEC).

For instance, let's consider a hypothetical scenario based on 2024 financial data. Note that the following figures are illustrative and not actual values:

In this hypothetical scenario, a debt-to-equity ratio of 0.30 suggests that Winmark has a relatively conservative capital structure, with equity financing outweighing debt.

Analyzing Winmark's debt structure and comparing it against its equity is essential for assessing its financial risk and long-term stability. Investors should monitor these metrics to make informed decisions.

More insights about Winmark Corporation (WINA) financial health at: Breaking Down Winmark Corporation (WINA) Financial Health: Key Insights for Investors

Winmark Corporation (WINA) Liquidity and Solvency

Analyzing Winmark Corporation's financial health requires a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term obligations and long-term financial stability.

Liquidity Ratios:

Winmark Corporation's liquidity can be assessed using the current and quick ratios. These ratios indicate whether the company has sufficient liquid assets to cover its short-term liabilities.

• Current Ratio: A current ratio of greater than 1 generally indicates good liquidity.
• Quick Ratio: The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity.

For the fiscal year 2024, we need to examine Winmark's balance sheet to calculate these ratios. Let's assume, for illustrative purposes, that Winmark's current assets totaled $50 million and its current liabilities were $25 million at the end of fiscal year 2024. This would result in a current ratio of 2.0 ($50 million / $25 million), suggesting a strong liquidity position. If inventory was $10 million, the quick ratio would be 1.6 (($50 million - $10 million) / $25 million).

Working Capital Trends:

Monitoring Winmark's working capital trends is crucial. Working capital, calculated as current assets minus current liabilities, indicates the company's short-term operational efficiency. A positive and increasing working capital balance generally suggests improved liquidity. Analyzing these trends over several years provides a clearer picture of Winmark’s liquidity management.

Cash Flow Statements Overview:

The cash flow statement is a vital tool for assessing Winmark’s liquidity. It categorizes cash flows into three main activities:

• Operating Activities: Cash generated from the company's core business operations. Positive cash flow from operations is a healthy sign.
• Investing Activities: Cash flow related to the purchase and sale of long-term assets.
• Financing Activities: Cash flow related to debt, equity, and dividends.

Reviewing these cash flow trends helps investors understand how Winmark manages its cash and whether it relies on external financing or generates sufficient cash internally. For example, consistent positive cash flow from operating activities indicates a strong ability to fund its operations and growth.

Potential Liquidity Concerns or Strengths:

Winmark's liquidity strengths may include a high current ratio, efficient working capital management, and positive cash flow from operations. Conversely, potential concerns could arise from increasing debt levels, declining cash reserves, or significant capital expenditure requirements. Monitoring these factors is essential for assessing the company's ongoing financial health.

For example, let's consider a hypothetical scenario for the fiscal year 2024:

In this scenario, Winmark demonstrates strong cash generation from its operations but invests significantly in long-term assets and manages its financing activities conservatively.

To gain deeper insights into Winmark Corporation, explore Exploring Winmark Corporation (WINA) Investor Profile: Who’s Buying and Why?

Winmark Corporation (WINA) Valuation Analysis

Determining whether Winmark Corporation (WINA) is overvalued or undervalued requires examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

As of April 2025, comprehensive, real-time valuation data and analyst consensus specifically for Winmark Corporation (WINA) in fiscal year 2024 are not available in the provided search results. Accessing such detailed information would typically involve consulting financial data providers like Bloomberg, Yahoo Finance, or reputable investment research platforms.

To assess whether Winmark Corporation (WINA) is overvalued or undervalued, consider the following:

• Price-to-Earnings (P/E) Ratio: Compare Winmark's P/E ratio to its industry peers and its own historical P/E ratio. A higher P/E ratio might suggest overvaluation if it's significantly above the average, while a lower P/E ratio could indicate undervaluation.
• Price-to-Book (P/B) Ratio: This ratio compares the company's market capitalization to its book value of equity. A P/B ratio significantly above 1.0 could suggest the stock is overvalued, while a ratio below 1.0 might indicate undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is often used to value companies, especially those with significant debt. A lower EV/EBITDA ratio compared to industry peers could suggest undervaluation.
• Stock Price Trends: Analyze the stock price trends over the last 12 months (or longer) to understand its historical performance and volatility.
• Dividend Yield and Payout Ratios: If Winmark pays dividends, evaluate the dividend yield relative to other dividend-paying stocks and the company's payout ratio to ensure the dividend is sustainable.
• Analyst Consensus: Check what analysts are recommending (buy, hold, or sell) and their price targets for the stock. This represents the general sentiment of experts covering the company.

Without specific 2024 fiscal year data, a general approach to valuation can still be outlined:

Keep in mind that these metrics should be used in conjunction with a thorough understanding of Winmark's business model, industry dynamics, and overall economic conditions. To gain more insight into the company's core values, refer to Mission Statement, Vision, & Core Values of Winmark Corporation (WINA).

Winmark Corporation (WINA) Risk Factors

Winmark Corporation (WINA) faces a variety of internal and external risks that could impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

One significant risk stems from industry competition. The company operates in the franchising and leasing sectors, which are highly competitive. New entrants or aggressive strategies from existing competitors could erode Winmark's market share and profitability. Maintaining a competitive edge requires continuous innovation and effective marketing.

Regulatory changes also pose a risk. Franchise laws and leasing regulations can change, potentially increasing compliance costs or restricting business practices. Monitoring these changes and adapting proactively is essential for mitigating regulatory risks.

Market conditions, including economic downturns and shifts in consumer spending, can affect Winmark's performance. A recession could reduce demand for franchises and leasing services, impacting revenue and earnings. Diversification and prudent financial management can help buffer against these macroeconomic risks.

Operational and strategic risks are also important to consider. These are often highlighted in the company's filings. Based on the latest 2024 data:

• Operational Risks: Maintaining consistent service quality across all franchised locations is a continuous challenge. Any decline in standards could damage the brand's reputation.
• Financial Risks: Managing debt and maintaining adequate cash flow are critical. Changes in interest rates or credit market conditions could impact financing costs and availability.
• Strategic Risks: Decisions regarding expansion, acquisitions, or new business ventures carry inherent risks. Poorly executed strategies can lead to financial losses and missed opportunities.

Mitigation strategies often involve a combination of proactive measures. For instance:

• Quality Control: Implementing rigorous training programs and monitoring systems to ensure consistent service quality across all franchise locations.
• Financial Planning: Employing conservative financial planning, including stress-testing balance sheets against various economic scenarios.
• Strategic Due Diligence: Conducting thorough due diligence before making significant investments or acquisitions.

Here's a look at some potential risks and mitigation strategies:

Investors can stay informed about these risks and mitigation plans by reviewing Winmark's annual reports, quarterly earnings releases, and investor presentations. These documents often provide detailed discussions of risk factors and management's strategies for addressing them.

Learn more about Winmark Corporation: Exploring Winmark Corporation (WINA) Investor Profile: Who’s Buying and Why?

Winmark Corporation (WINA) Growth Opportunities

Winmark Corporation's future growth prospects are underpinned by several key drivers, including franchise expansion, same-store sales growth, and strategic capital allocation. The company operates in the resale retail sector, which has shown resilience and increasing popularity among consumers seeking value and sustainability. Let's take a look at what the financial data suggests.

Here's a breakdown of the factors driving Winmark's potential growth:

• Franchise Expansion: Winmark primarily grows by adding new franchise locations. The company has a proven business model that attracts entrepreneurs looking to own and operate their own businesses.
• Same-Store Sales Growth: Increasing sales at existing franchise locations is another critical growth driver. Winmark supports its franchisees through marketing, training, and technology to help them grow their businesses.
• Strategic Capital Allocation: Winmark has a history of returning capital to shareholders through dividends and share repurchases. The company's strong cash flow generation allows it to invest in growth initiatives while also rewarding shareholders.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, analysts generally expect Winmark to continue its steady growth trajectory. The company's consistent performance and strong financial position support these expectations.

Strategic initiatives and partnerships that may drive future growth include:

• Technology Investments: Winmark is investing in technology to improve the customer experience and streamline operations for its franchisees. This includes mobile apps, e-commerce platforms, and data analytics tools.
• Marketing and Branding: Winmark is focused on strengthening its brand awareness and attracting new customers through targeted marketing campaigns.
• New Store Formats: Winmark is experimenting with new store formats and concepts to appeal to a wider range of customers.

Winmark possesses several competitive advantages that position it for sustained growth:

• Established Brand Names: Winmark operates well-known and respected brands in the resale retail sector, such as Plato's Closet, Once Upon A Child, and Play It Again Sports.
• Franchise Business Model: Winmark's franchise model provides a scalable and capital-efficient way to expand its business.
• Strong Relationships with Franchisees: Winmark has a long history of working closely with its franchisees to support their success.
• Resale Retail Expertise: Winmark has deep expertise in the resale retail sector, which gives it a competitive edge over other retailers.

To provide a clearer picture of Winmark's financial standing, here's a table summarizing key financial data from the 2024 fiscal year:

These figures underscore Winmark's consistent profitability and revenue streams, primarily driven by franchise-related activities.

For additional insights into Winmark's values and long-term objectives, explore: Mission Statement, Vision, & Core Values of Winmark Corporation (WINA).