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Bread Financial Q4 Earnings and Revenues Top Estimates, Rise Y/Y
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Key Takeaways
BFH posted Q4 operating income of $2.07 per share, topping estimates as revenues rose 5.3% to $975 million.
Pricing changes lifted results for BFH, while lower net loss and delinquency rates supported margins.
BFH boosted capital returns with a 10% dividend hike and $120 million in Q4 buybacks.
Bread Financial Holdings, Inc. (BFH - Free Report) reported fourth-quarter operating income of $2.07 per share, significantly outperforming the Zacks Consensus Estimate by 417.5%. The bottom line surged 406% year over year.
Revenues increased 5.3% from the prior-year level to $975 million, exceeding the consensus estimate by 3.62%. The strong performance primarily reflected the implementation of pricing changes, partially offset by lower billed late fees and higher retailer share arrangements.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Credit sales of $8.1 billion increased 2% year over year, driven by new partner growth and increased general-purpose spending. Average loan decreased 1% to $18 billion, while end-of-period loan declined 0.5% to $18.8 billion, due to an increasing payment rate and the ongoing effect of elevated gross losses.
Total interest income increased 2% to $1.2 billion, beating the Zacks Consensus Estimate by 1.9%, but missing our model estimate by 0.4%. Net interest margin improved 110 basis points to 18.9% compared with the Zacks Consensus Estimate of 18%.
Total non-interest expenses decreased 5% to $500 million, driven by the impact from repurchased debt. The delinquency rate of 5.8% decreased from 5.9% year over year.
The net loss rate of 7.4% improved 60 basis points year over year. Pre-tax pre-provision earnings increased 7% year over year to $420 million.
Adjusted PPNR, a non-GAAP financial measure that excludes gains on portfolio sales and the impact of debt repurchases, increased 19% year over year to $475 million.
Financial Update
Bread Financials exited the fourth quarter with cash and cash equivalents of $3.6 billion, down 2% from the 2024-end level.
Tangible book value was $57.57 per share, as of Dec. 31, 2025, up 23% year over year. Return on average equity was 6.2%, which increased 530 basis points year over year.
Capital Deployment
The board of directors raised the dividend by 10% to 23 cents per share. The dividend is payable on March 16, 2026, to common stockholders of record at the close of business on Feb. 27, 2026.
BFH repurchased $120 million, or 1.9 million shares, of common stock during the fourth quarter of 2025, with $240 million remaining under share repurchase authorization at 2026-end.
Full-Year Highlights
The company reported full-year 2025 operating income of $12.09 per share, which outpaced the Zacks Consensus Estimate by 87.1% and rose 57% year over year.
Total operating revenues of $3.8 billion were in line with the Zacks Consensus Estimate. The top line rose 0.2% year over year on net interest income and other.
Credit sales of $27.8 billion increased 3% year over year.
2026 Outlook
BFH assumes that interest rate cuts by the Federal Reserve could modestly pressure total net interest income.
The company expects total revenue growth in the low single digits compared with full-year 2025, broadly in line with average loan growth.
The net loss rate is expected to be in the range of 7.2% to 7.4%, with improvement anticipated due to continued consumer resilience, effective credit management actions, and ongoing shifts in risk and product mix.
The company expects full-year normalized effective tax rate to be in the range of 25% to 27%.
American Express Company (AXP - Free Report) reported fourth-quarter 2025 earnings per share of $3.53, which missed the Zacks Consensus Estimate by 0.3%. However, the bottom line climbed 16% year over year.
Total revenues, net of interest expense, totaled $19 billion, exceeding the Zacks Consensus Estimate by 0.8%. The top line increased 10% year over year during the quarter.
Synchrony Financial (SYF - Free Report) reported fourth-quarter 2025 adjusted earnings per share of $2.18, beating the Zacks Consensus Estimate by 8.1%. The bottom line improved from $1.91 in the year-ago period.
Net interest income totaled $4.8 billion, reflecting 3.7% year-over-year growth, though it missed the consensus estimate by 0.6%.
Virtu Financial, Inc. (VIRT - Free Report) reported fourth-quarter adjusted earnings per share (EPS) of $1.85, which beat the Zacks Consensus Estimate by 44.8%. The bottom line increased 62.3% year over year.
Adjusted Net Trading Income rose 34% year over year to $613.4 million, exceeding the consensus estimate by 18.2%.
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Bread Financial Q4 Earnings and Revenues Top Estimates, Rise Y/Y
Key Takeaways
Bread Financial Holdings, Inc. (BFH - Free Report) reported fourth-quarter operating income of $2.07 per share, significantly outperforming the Zacks Consensus Estimate by 417.5%. The bottom line surged 406% year over year.
Revenues increased 5.3% from the prior-year level to $975 million, exceeding the consensus estimate by 3.62%. The strong performance primarily reflected the implementation of pricing changes, partially offset by lower billed late fees and higher retailer share arrangements.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Bread Financial Holdings, Inc. price-consensus-eps-surprise-chart | Bread Financial Holdings, Inc. Quote
Behind the Headlines
Credit sales of $8.1 billion increased 2% year over year, driven by new partner growth and increased general-purpose spending. Average loan decreased 1% to $18 billion, while end-of-period loan declined 0.5% to $18.8 billion, due to an increasing payment rate and the ongoing effect of elevated gross losses.
Total interest income increased 2% to $1.2 billion, beating the Zacks Consensus Estimate by 1.9%, but missing our model estimate by 0.4%. Net interest margin improved 110 basis points to 18.9% compared with the Zacks Consensus Estimate of 18%.
Total non-interest expenses decreased 5% to $500 million, driven by the impact from repurchased debt. The delinquency rate of 5.8% decreased from 5.9% year over year.
The net loss rate of 7.4% improved 60 basis points year over year. Pre-tax pre-provision earnings increased 7% year over year to $420 million.
Adjusted PPNR, a non-GAAP financial measure that excludes gains on portfolio sales and the impact of debt repurchases, increased 19% year over year to $475 million.
Financial Update
Bread Financials exited the fourth quarter with cash and cash equivalents of $3.6 billion, down 2% from the 2024-end level.
Tangible book value was $57.57 per share, as of Dec. 31, 2025, up 23% year over year. Return on average equity was 6.2%, which increased 530 basis points year over year.
Capital Deployment
The board of directors raised the dividend by 10% to 23 cents per share. The dividend is payable on March 16, 2026, to common stockholders of record at the close of business on Feb. 27, 2026.
BFH repurchased $120 million, or 1.9 million shares, of common stock during the fourth quarter of 2025, with $240 million remaining under share repurchase authorization at 2026-end.
Full-Year Highlights
The company reported full-year 2025 operating income of $12.09 per share, which outpaced the Zacks Consensus Estimate by 87.1% and rose 57% year over year.
Total operating revenues of $3.8 billion were in line with the Zacks Consensus Estimate. The top line rose 0.2% year over year on net interest income and other.
Credit sales of $27.8 billion increased 3% year over year.
2026 Outlook
BFH assumes that interest rate cuts by the Federal Reserve could modestly pressure total net interest income.
The company expects total revenue growth in the low single digits compared with full-year 2025, broadly in line with average loan growth.
The net loss rate is expected to be in the range of 7.2% to 7.4%, with improvement anticipated due to continued consumer resilience, effective credit management actions, and ongoing shifts in risk and product mix.
The company expects full-year normalized effective tax rate to be in the range of 25% to 27%.
BFH’s Zacks Rank
Bread Financial currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Peers
American Express Company (AXP - Free Report) reported fourth-quarter 2025 earnings per share of $3.53, which missed the Zacks Consensus Estimate by 0.3%. However, the bottom line climbed 16% year over year.
Total revenues, net of interest expense, totaled $19 billion, exceeding the Zacks Consensus Estimate by 0.8%. The top line increased 10% year over year during the quarter.
Synchrony Financial (SYF - Free Report) reported fourth-quarter 2025 adjusted earnings per share of $2.18, beating the Zacks Consensus Estimate by 8.1%. The bottom line improved from $1.91 in the year-ago period.
Net interest income totaled $4.8 billion, reflecting 3.7% year-over-year growth, though it missed the consensus estimate by 0.6%.
Virtu Financial, Inc. (VIRT - Free Report) reported fourth-quarter adjusted earnings per share (EPS) of $1.85, which beat the Zacks Consensus Estimate by 44.8%. The bottom line increased 62.3% year over year.
Adjusted Net Trading Income rose 34% year over year to $613.4 million, exceeding the consensus estimate by 18.2%.