Winmark Corp

-10.51%

Winmark has become an unusually interesting value story after a sharp selloff. Shares recently traded near $307, down from about $527 at the 52 week high. The decline is striking because the business is still producing exceptionally high margins, yet investors are questioning the pace and quality of earnings growth. Second quarter revenue reached $22.0 million, up from $20.4 million a year earlier. Net income was $10.4 million, compared with $10.6 million, while operating income remained strong. The pressure came partly from higher technology, marketing and outside service expenses. First half revenue increased to $42.8 million from $42.3 million, with royalties and franchise fees rising 8.1%. The stock fell after recent earnings repeatedly missed analyst expectations, while investors are also adjusting to the disappearance of leasing income that boosted 2025 results. Still, the company continues investing in technology and marketing and plans to launch the Plato’s Closet North American advertising fund. The quarterly dividend increased to $1.02 in 2026, from $0.96 in 2025 and $0.90 in 2024. Recovery could follow if earnings growth accelerates, but risks include slower franchise sales, rising costs, valuation pressure and limited liquidity. This review is for informational and educational purposes only, not financial advice.