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BFH reported Q2 EPS of $3.14, beating estimates by 69.7% and rising 18% year over year.
Revenues fell 1.1% to $929M, hurt by lower finance charges and late fees from lower prime rates.
Credit sales rose 4% to $6.8B, supported by new partner growth and more general-purpose spending.
Bread Financial Holdings’ (BFH - Free Report) operating income of $3.14 per share for the second quarter of 2025 beat the Zacks Consensus Estimate by 69.7%. The bottom line improved 18% year over year. The quarterly results reflected a drop in revenues but higher credit sales.
Behind the Headlines of BFH
Revenues decreased 1.1% year over year to $929 million, primarily due to lower finance charges and late fees resulting from a reduced average prime rate, lower delinquencies, and a gradual shift in risk and product mix, leading to a smaller proportion of private label accounts. The top line also missed the consensus estimate by 0.9%.
Credit sales of $6.8 billion increased 4%, driven by new partner growth and increased general-purpose spending. Our estimate was $6.6 billion.
Average loans of $17.7 billion decreased 1%, primarily due to the macroeconomic environment, which resulted in lower consumer spending, higher gross losses and tighter underwriting standards. Our estimate for the same was $18.1 billion.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Total interest income decreased 3% to $1.2 billion. Our estimate and the Zacks Consensus Estimate were both pegged at $1.2 billion.
Net interest margin contracted 30 basis points (bps) to 17.7%. The Zacks Consensus Estimate for the metric was 17.4% and our estimate was 16.1%.
Total non-interest expenses increased 3% to $481 million, primarily driven by debt extinguishment costs of $13 million in the quarter. Our estimate was $477.6 million.
The delinquency rate of 5.7% improved 30 bps year over year. The net loss rate of 7.9% improved 70 basis points year over year.
Pre-tax pre-provision earnings decreased 5% year over year to $448 million due to lower net interest income.
BFH’s Financial Update
As of June 30, 2025, cash and cash equivalents were $4.2 billion, up 14.4% from the level of 2024.
As of June 30, 2025, long-term debt and other debt increased 28.7% from the 2024-end level to $1.3 billion.
Tangible book value was $52.21 per share as of June 30, 2025, up 7% year over year.
Return on average equity was 17.5% in the second quarter of 2025. The figure expanded 80 basis points year over year.
Capital Deployment of BFH
In April, it repurchased 1.1 million shares, exhausting the board-authorized share repurchase program of $150 million.
BFH’s 2025 Guidance
Management estimates average receivables to be flat to slightly down from 2024. It expects average credit card and other loans to be flat to slightly down from the 2024 level.
Total revenues are estimated to be flat year over year.
The net loss rate is guided in the range of 7.8-7.9%.
American Express Company (AXP - Free Report) reported second-quarter 2025 earnings per share (EPS) of $4.08, which beat the Zacks Consensus Estimate by 5.7%. The bottom line climbed 17% year over year. Total revenues net of interest expense amounted to $17.9 billion, which outpaced the Zacks Consensus Estimate by 1%. The top line improved 9% year over year in the quarter under review.
Network volumes of $472 billion rose 7% year over year in the second quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 1.3%. Total interest income of $6.3 billion increased 8% year over year and beat the consensus mark by 0.4%. Provision for credit losses rose 11% year over year to $1.4 billion due to higher net write-offs and net reserve build.
American Express still anticipates revenues to increase between 8% and 10% in 2025 from the 2024 level of $65.9 billion. Management expects EPS in the range of $15-$15.50.
Upcoming Releases
Virtu Financial (VIRT - Free Report) will report second-quarter 2025 results on July 30, before market open. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.30 per share, suggesting an increase of 56.3% from the year-ago quarter’s reported figure.
VIRT’s earnings beat estimates in each of the last four quarters.
Coinbase Global (COIN - Free Report) will report second-quarter 2025 results on July 31, after market close. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at 83 cents, suggesting a decrease of 22.4% from the year-ago quarter’s reported figure.
COIN’s earnings beat estimates in three of the last four quarters, while missing in one.
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Bread Financial Q2 Earnings Beat, Revenues Miss, Credit Sales Rise
Key Takeaways
Bread Financial Holdings’ (BFH - Free Report) operating income of $3.14 per share for the second quarter of 2025 beat the Zacks Consensus Estimate by 69.7%. The bottom line improved 18% year over year. The quarterly results reflected a drop in revenues but higher credit sales.
Behind the Headlines of BFH
Revenues decreased 1.1% year over year to $929 million, primarily due to lower finance charges and late fees resulting from a reduced average prime rate, lower delinquencies, and a gradual shift in risk and product mix, leading to a smaller proportion of private label accounts. The top line also missed the consensus estimate by 0.9%.
Credit sales of $6.8 billion increased 4%, driven by new partner growth and increased general-purpose spending. Our estimate was $6.6 billion.
Average loans of $17.7 billion decreased 1%, primarily due to the macroeconomic environment, which resulted in lower consumer spending, higher gross losses and tighter underwriting standards. Our estimate for the same was $18.1 billion.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Bread Financial Holdings, Inc. price-consensus-eps-surprise-chart | Bread Financial Holdings, Inc. Quote
Total interest income decreased 3% to $1.2 billion. Our estimate and the Zacks Consensus Estimate were both pegged at $1.2 billion.
Net interest margin contracted 30 basis points (bps) to 17.7%. The Zacks Consensus Estimate for the metric was 17.4% and our estimate was 16.1%.
Total non-interest expenses increased 3% to $481 million, primarily driven by debt extinguishment costs of $13 million in the quarter. Our estimate was $477.6 million.
The delinquency rate of 5.7% improved 30 bps year over year. The net loss rate of 7.9% improved 70 basis points year over year.
Pre-tax pre-provision earnings decreased 5% year over year to $448 million due to lower net interest income.
BFH’s Financial Update
As of June 30, 2025, cash and cash equivalents were $4.2 billion, up 14.4% from the level of 2024.
As of June 30, 2025, long-term debt and other debt increased 28.7% from the 2024-end level to $1.3 billion.
Tangible book value was $52.21 per share as of June 30, 2025, up 7% year over year.
Return on average equity was 17.5% in the second quarter of 2025. The figure expanded 80 basis points year over year.
Capital Deployment of BFH
In April, it repurchased 1.1 million shares, exhausting the board-authorized share repurchase program of $150 million.
BFH’s 2025 Guidance
Management estimates average receivables to be flat to slightly down from 2024. It expects average credit card and other loans to be flat to slightly down from the 2024 level.
Total revenues are estimated to be flat year over year.
The net loss rate is guided in the range of 7.8-7.9%.
BFH’s Zacks Rank
Bread Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Release
American Express Company (AXP - Free Report) reported second-quarter 2025 earnings per share (EPS) of $4.08, which beat the Zacks Consensus Estimate by 5.7%. The bottom line climbed 17% year over year. Total revenues net of interest expense amounted to $17.9 billion, which outpaced the Zacks Consensus Estimate by 1%. The top line improved 9% year over year in the quarter under review.
Network volumes of $472 billion rose 7% year over year in the second quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 1.3%. Total interest income of $6.3 billion increased 8% year over year and beat the consensus mark by 0.4%. Provision for credit losses rose 11% year over year to $1.4 billion due to higher net write-offs and net reserve build.
American Express still anticipates revenues to increase between 8% and 10% in 2025 from the 2024 level of $65.9 billion. Management expects EPS in the range of $15-$15.50.
Upcoming Releases
Virtu Financial (VIRT - Free Report) will report second-quarter 2025 results on July 30, before market open. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.30 per share, suggesting an increase of 56.3% from the year-ago quarter’s reported figure.
VIRT’s earnings beat estimates in each of the last four quarters.
Coinbase Global (COIN - Free Report) will report second-quarter 2025 results on July 31, after market close. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at 83 cents, suggesting a decrease of 22.4% from the year-ago quarter’s reported figure.
COIN’s earnings beat estimates in three of the last four quarters, while missing in one.