Winmark Corporation (WINA)

Winmark Corporation: A Comprehensive Overview

Company Profile

History and Background:

Winmark Corporation (WINA) is a franchisor and operator of U.S.-based retail stores, primarily in the resale sector. Founded in 1984 and headquartered in Minneapolis, Minnesota, the company has grown to become a leader in the resale industry, with a network of over 1,200 franchised and company-owned stores across the United States and Canada.

Core Business Areas:

Winmark's core business revolves around franchising and operating retail stores under various brands, including:

• Plato's Closet: A leading retailer of gently used apparel and accessories for teens and young adults.
• Once Upon A Child: Specializes in buying and selling gently used children's clothing, toys, and baby gear.
• Music Go Round: A retailer of used musical instruments and accessories.
• Play It Again Sports: Focuses on buying and selling used sporting goods and fitness equipment.
• Style Encore: Offers upscale women's clothing and accessories.
• Tradehome: Specializes in buying and selling used furniture and home decor.

Leadership Team and Corporate Structure:

Winmark boasts a seasoned leadership team with extensive experience in the retail and franchise industries. The current CEO, Brett K. Redenbaugh, has been with the company since 2006 and has held various leadership positions. The executive team also includes experienced professionals with expertise in finance, operations, and franchise development.

The company operates under a decentralized structure, with each brand division having its own dedicated leadership team and operational framework. This allows for tailored strategies and efficient decision-making within each brand segment.

Top Products and Market Share:

Top Products and Offerings:

Winmark's top products and offerings vary by brand, but generally include:

• Gently used clothing and accessories: This accounts for a significant portion of the company's revenue, particularly through Plato's Closet and Once Upon A Child.
• Used musical instruments and accessories: Music Go Round caters to musicians of all levels, offering a diverse range of instruments and equipment.
• Used sporting goods and fitness equipment: Play It Again Sports attracts athletes and fitness enthusiasts looking for high-quality, affordable equipment.
• Upscale women's clothing and accessories: Style Encore provides a curated selection of designer and brand-name clothing for women.
• Used furniture and home decor: Tradehome offers consumers a sustainable and budget-friendly option for furnishing their homes.

Market Share Analysis:

Winmark holds a significant market share in the resale industry, particularly within its core brand segments. For instance, Plato's Closet is estimated to hold a dominant position in the teen and young adult resale apparel market.

However, determining the exact market share across all segments is challenging due to the fragmented nature of the resale industry and limited publicly available data.

Product Performance and Competitor Analysis:

Winmark's brands have consistently demonstrated strong performance, with many stores achieving top sales and profitability within their respective franchises. The company's focus on providing high-quality products, exceptional customer service, and a convenient shopping experience has contributed to its success.

However, Winmark faces competition from several established players in the resale industry, including Savers, The Salvation Army, and independent thrift stores. These competitors offer similar products and services, making it crucial for Winmark to maintain its competitive edge through its strong brand recognition, focused customer base, and efficient operating model.

Total Addressable Market:

The total addressable market (TAM) for the resale industry in the U.S. is estimated to be substantial, with studies suggesting a market size of over $30 billion. This TAM is further fueled by the growing popularity of sustainability and the increasing consumer interest in finding affordable alternatives to traditional retail.

Financial Performance:

Recent Financial Analysis:

Winmark has consistently delivered strong financial performance in recent years, with revenue exceeding $500 million in 2022. The company's net income and profit margins have also shown steady growth, indicating its ability to generate healthy profits. Additionally, Winmark has maintained a consistent dividend payout history, returning value to shareholders.

Year-over-Year Comparison:

A year-over-year comparison of Winmark's financial statements reveals positive trends. Revenue, net income, and EPS have all increased consistently over the past few years, demonstrating the company's sustained growth trajectory.

Cash Flow and Balance Sheet Health:

Winmark maintains a healthy cash flow position, enabling it to invest in new store openings, acquisitions, and shareholder returns. The company's balance sheet also reflects a strong financial position, with a manageable debt-to-equity ratio.

Dividends and Shareholder Returns:

Dividend History:

Winmark has a consistent dividend payout history, with a current annual dividend yield of approximately 1.5%. The company has also increased its dividend payout ratio in recent years, indicating its commitment to returning value to shareholders.

Shareholder Returns:

Shareholders of Winmark have enjoyed significant returns over the past few years. The company's stock price has consistently outperformed the market, delivering impressive total shareholder returns.

Growth Trajectory:

Historical Growth Analysis:

Winmark has experienced consistent growth over the past 5 to 10 years, with revenue and earnings per share (EPS) increasing steadily. The company's expansion through franchising and strategic acquisitions has played a key role in this growth.

Future Growth Projections:

Analysts project continued growth for Winmark in the coming years, driven by the expanding resale market, potential new store openings, and ongoing acquisitions. The company's focus