Winmark Corp. reported earnings of $7.33 million, or $1.87 per share, in the first quarter ended March 28 against $7.28 million, or $1.73, a year ago, representing a gain of 0.7 percent
First-quarter earnings were positively impacted by an increase in customer activity in the company’s lease portfolio. Despite a lower portfolio size, the company’s leasing income net of leasing expense was comparable to the first quarter of 2019. Earnings also benefited from a lower level of selling, general and administrative expenses in the first quarter of approximately $1.2 million when compared to the first quarter of 2019. These items were partially offset by an additional provision for credit losses in the company’s lease portfolio to reflect the estimated impact of the COVID-19 pandemic, as well as lower royalty revenues when compared to the first quarter of 2019.
“Following a strong start to the year, during the last three weeks of the quarter, our franchising performance was negatively impacted by the COVID-19 pandemic. This led to a substantial number of temporary store closings and greatly reduced customer traffic for our franchised locations that were still operational during the quarter,” stated Brett D. Heffes, chairman and chief executive officer. “I want to express my sincere gratitude and thank you to our employees who are managing through this crisis in an exceptional manner. I applaud your work ethic, passion for Winmark and your commitment to continuing to support both our franchisees and leasing customers during this unprecedented period of time.”
“While our franchisees’ operations have been negatively impacted and our visibility is limited, we are still experiencing modest levels of royalties due to the ingenuity, resiliency and perseverance of our franchise partners. We are inspired daily by our franchisees and the efforts they are undertaking to continue to serve the communities in which we operate.”
At March 28, 2020, there were 1,256 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.
According to Winmark’s recently-filed 10K, Play It Again Sports’ 2019 system-wide sales were $227 million, up from $223 million in fiscal 2018. Play It Again Sports had 280 stores open at the close of the year, down from 281 the prior year. Four stores were opened and five closed.
Founded in 1988, Play It Again Sports’ stores buy, sell, trade and consign gently used and new sporting goods, equipment and accessories for a variety of athletic activities including team sports (baseball/softball, hockey, football, lacrosse, soccer), fitness, ski/snowboard and golf among others.
Photo courtesy Play It Again Sports
