Stock decline of Winmark Corporation today
Winmark Corporation, a retail company specialising in second-hand clothing and accessories, is experiencing a downturn in its stock price due to concerns about its stretched valuation and softening spending within its key customer demographic – primarily young adults.
According to a recent report by The Wall Street Journal, market research firm Circana has found that year-over-year in-store and online purchases by 18- to 24-year-olds fell by 13% between January and April. Spending on apparel and accessories within this age group decreased by 11% and 18%, respectively. This demographic is a primary target for Winmark’s Plato’s Closet brand, which focuses on tween-to-young-20s shoppers.
The decline in spending among this age group is attributed to several factors, including the resumption of student loan payments, a challenging job market, and rising credit card debt. As a result, investors are wary that Winmark may struggle to grow or maintain earnings, especially since its stock price and price-to-earnings ratio have recently surged to historic highs, far outpacing projected revenue and earnings growth rates.
Analysts expect only modest yearly revenue growth (about 3-4%), which does not justify its current valuation in the eyes of many market participants. Winmark's shares are currently selling at nearly $380 per share, which is nearly 33 times its trailing earnings.
Winmark's profits declined last year, and analysts predict that profits will grow no more than 7% next year. The lack of direct negative news, combined with the sudden 16% drop as of late June 2025, suggests the decline is largely driven by these broader concerns over consumer spending and the company’s valuation, rather than any specific company-centric event.
The weakening consumer spending may negatively impact Winmark’s financial numbers, particularly as the company relies heavily on its key customer demographic. The decline in spending among 18- to 24-year-olds may be affecting Winmark’s business, and the company will need to adapt to these changing consumer trends to ensure long-term success.
Investors may need to reconsider their strategy for investing in Winmark Corporation, given the concerns about its stretched valuation and the softening spending within its key customer demographic. The decline in spending among 18- to 24-year-olds, a primary target for Winmark’s Plato’s Closet brand, could significantly impact the company's financial performance. As a result, it would be prudent to consider alternative investment opportunities in the finance sector, such as stocks in other retail companies or sectors less reliant on this demographic. A sound investment strategy in the stock-market should always take into account broader economic trends and consumer behavior.
