Bread Financial (NYSE:BFH) Issues Quarterly Earnings Results

Key Points

• Bread Financial beat quarterly expectations: EPS was $3.84 versus the $3.34 consensus, while revenue reached $1.02 billion, up 4.7% year over year and slightly above estimates. However, EPS declined from $4.02 in the prior-year quarter.
• Loan growth and credit trends improved: Loans increased 7% to $18.9 billion, credit sales rose 9%, and net credit losses and delinquencies both declined year over year. Consumer deposits also grew 21% to $9.9 billion.
• Shareholder and partnership momentum continued, though margin pressure remains: The company raised its quarterly dividend 9% and renewed its Sephora relationship, but expects modest fourth-quarter net interest margin pressure and minimal buybacks as it funds seasonal loan growth.

Bread Financial (NYSE:BFH - Get Free Report) released its earnings results on Thursday. The company reported $3.84 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $3.34 by $0.50, FiscalAI reports. The business had revenue of $1.02 billion during the quarter, compared to analyst estimates of $1.01 billion. Bread Financial had a net margin of 11.95% and a return on equity of 18.42%. The company's revenue for the quarter was up 4.7% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $4.02 earnings per share.

Here are the key takeaways from Bread Financial's conference call:

• Loan growth and revenue remained strong: Third-quarter end-of-period loans rose 7% to $18.9 billion, credit sales increased 9%, and revenue grew 5% year over year. Management cited new partnerships, general-purpose spending, and momentum in furniture and installment-loan programs.
• Credit performance improved: The net credit loss rate declined 99 basis points year over year to 6.40%, while delinquencies fell 47 basis points to 5.57%. Bread raised its 2026 net loss rate outlook for the second consecutive quarter, now expecting 6.9%–7.0%.
• Funding and balance-sheet strength advanced: Consumer deposits increased 21% to $9.9 billion and represented 53% of total funding, while the completed bank merger is expected to provide additional deposit-growth and capital efficiencies. Moody’s also upgraded the company’s credit rating.
• Partner momentum and shareholder returns continued: Bread renewed long-term agreements with Signet Jewelers and Sephora, repurchased $75 million of stock, and increased its quarterly dividend by 9%. Management also highlighted opportunities from technology, analytics, and AI investments.
• Some profitability headwinds remain: Management expects fourth-quarter net interest margin to decline modestly because of seasonality, lower billed late fees, and deposit-rate pressure, while the evolving product mix may weigh on margins. Fourth-quarter buybacks are expected to be minimal as capital is directed toward seasonal loan growth.

Bread Financial Stock Down 1.7%

Shares of NYSE BFH opened at $106.80 on Thursday. The company has a 50 day simple moving average of $104.81 and a 200-day simple moving average of $98.46. The company has a market capitalization of $4.10 billion, a P/E ratio of 8.32, a P/E/G ratio of 0.83 and a beta of 1.15. The company has a debt-to-equity ratio of 0.25, a current ratio of 1.17 and a quick ratio of 1.17. Bread Financial has a 1 year low of $59.26 and a 1 year high of $114.53.

Key Headlines Impacting Bread Financial

Here are the key news stories impacting Bread Financial this week:

• Positive Sentiment: Q3 earnings and revenue exceeded estimates. Bread Financial reported adjusted earnings of $3.84 per share, above the $3.26–$3.34 analyst estimates, while revenue of $1.02 billion surpassed expectations of approximately $1.01 billion and increased 4.7% year over year. However, EPS declined from $4.02 in the prior-year quarter. Bread Financial Holdings Surpasses Q3 Earnings and Revenue Estimates
• Positive Sentiment: Common dividend raised 9%. The board increased the quarterly common-stock dividend to $0.25 per share from $0.23, payable December 15 to shareholders of record on November 30. The company also declared quarterly dividends on both series of preferred stock, signaling continued shareholder returns and confidence in cash generation. Bread Financial Declares Dividends
• Positive Sentiment: Sephora renewed its relationship with Bread Financial. The long-term renewal supports Sephora’s branded credit and loyalty programs, helping preserve a major merchant partnership and potentially supporting future payment volume. Bread Financial and Sephora Sign Long-Term Renewal
• Neutral Sentiment: Bread Financial released September net principal loss-rate and delinquency data alongside its quarterly results. These credit metrics are particularly important for investors in a consumer-lending company, but the provided report does not include the figures or their year-over-year direction. Bread Financial Provides Performance Update
• Negative Sentiment: Profit growth remains a concern. Although BFH beat quarterly expectations, earnings per share fell year over year. Investors may also be awaiting management commentary on credit losses, delinquencies, consumer spending and the outlook before assigning greater value to the earnings beat.

Insiders Place Their Bets

In other Bread Financial news, Director Praniti Lakhwara sold 2,802 shares of the firm's stock in a transaction on Tuesday, July 28th. The stock was sold at an average price of $106.12, for a total transaction of $297,348.24. Following the completion of the sale, the director owned 4,458 shares of the company's stock, valued at $473,082.96. This trade represents a 38.60% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Insiders own 1.30% of the company's stock.

Analyst Ratings Changes

A number of research firms recently weighed in on BFH. Seaport Research Partners restated a "buy" rating and set a $121.00 price target on shares of Bread Financial in a research report on Wednesday, October 7th. Royal Bank Of Canada reiterated a "sector perform" rating and issued a $115.00 price objective on shares of Bread Financial in a report on Friday, July 24th. The Goldman Sachs Group boosted their target price on Bread Financial from $94.00 to $108.00 and gave the stock a "neutral" rating in a report on Tuesday, July 7th. TD Cowen dropped their price target on Bread Financial from $114.00 to $111.00 and set a "hold" rating for the company in a research report on Tuesday, October 6th. Finally, Barclays increased their price target on Bread Financial from $109.00 to $110.00 and gave the company an "equal weight" rating in a report on Monday, October 5th. Eight equities research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the company presently has an average rating of "Hold" and an average target price of $112.29.

Bread Financial Company Profile

Bread Financial Holdings, Inc NYSE: BFH is a financial services company that provides payment, lending and savings solutions to consumers and businesses. Its offerings include private-label and co-branded credit cards, installment lending, buy now, pay later services and deposit products.

The company operates through its Bread platform, which supports merchants with financing options, payment processing and customer loyalty solutions. Its consumer products have included Bread Cashback credit cards, Bread Pay installment payment services and Bread Savings deposit accounts.

Bread Financial primarily serves consumers and merchants in the United States, with solutions designed for retail, travel, home improvement and other industries.

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