Winmark Corporation, the parent of Play It Again Sports, reported net income for the quarter ended June 27 of $5.06 million, or $1.33 per share, compared to net income of $7.3 million, or $1.79, in the second quarter of 2019.
For the six months ended June 27, 2020, net income was $12.4 million (or $3.21 per share diluted) compared to net income of $14.6 million (or $3.52 per share diluted) for the same period last year.
Second-quarter results were impacted by COVID-19with royalty revenues 38 percent lower than the second quarter of 2019. The company experienced a sequential monthly improvement in royalties during the second quarter as franchised stores reopened with April, May and June royalty revenues of 16 percent, 76 percent and 108 percent of 2019, respectively. Additionally, during the quarter, the company repaid $40.0 million in borrowings under its revolving credit facility, ending the quarter with no revolver borrowings and $1.3 million of cash.
Brett D. Heffes, CEO, commented, “Our franchisee’s performance improved throughout the quarter as they have proven extremely resilient during the pandemic. While store operations are not fully back to pre-COVID levels, substantial progress has been made in the past 90 days, and we are pleased with the overall performance of the company. I am impressed daily by the efforts of both our franchisees as well as our Winmark employees.”
At June 27, 2020, Winmark had 1,255 franchises in operation under the brands Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. An additional 42 retail franchises have been awarded but are not open.
Photo courtesy Play It Again Sports
