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Bread Financial Q1 Earnings Beat Estimates on Higher Credit Sales
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Key Takeaways
BFH Q1 EPS of $4.18 beat estimates by 39.3%, rising 49% y/y.
Bread Financial revenues rose 5% on higher credit sales, pricing actions and margin expansion.
BFH net interest margin climbed 120 bps to 19.3%, while expenses dipped 1%.
Bread Financial Holdings, Inc. (BFH - Free Report) reported first-quarter 2026 operating income of $4.18 per share, outperforming the Zacks Consensus Estimate by 39.3%. The bottom line rose 49% year over year.
Revenues increased 5% from the prior-year level to $1 billion, exceeding the consensus estimate by 1.1%. The solid performance reflected higher revenues, driven by pricing actions and increased credit sales, along with an improved net interest margin. However, gains were partially offset by elevated operating expenses and higher compensation costs.
Behind the Headlines
Credit sales of $6.5 billion increased 7% year over year, driven by new partner growth and increased general-purpose spending. Average loan increased 1% to $18.3 billion, and end-of-period loans rose 2% to $18.1 billion, supported by strong credit sales and partner expansion.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Total interest income increased 2% to $1.2 billion, missing the Zacks Consensus Estimate by 0.4%, and our model estimate by 2.1%. The net interest margin improved 120 basis points to 19.3%, whereas the Zacks Consensus Estimate was pegged at 18.2%.
Total non-interest expenses decreased 1% to $472 million, aided by cost discipline and a data processing credit, partly offset by higher compensation costs. The delinquency rate of 5.6% improved from 5.9% year over year.
The net loss rate of 7.3% improved 83 basis points year over year. Pre-tax pre-provision earnings increased 11% year over year to $546 million.
Adjusted PPNR, a non-GAAP financial measure that excludes gains on portfolio sales and the impact of debt repurchases, increased 11% year over year to $546 million.
Financial Update
Bread Financial exited the first quarter 2026 with cash and cash equivalents of $3.6 billion, down 1% from the 2025-end level.
Tangible book value was $61.57 per share as of March 31, 2026, up 26% year over year. Return on average equity was 21.2%, which increased 350 basis points year over year.
Capital Deployment
BFH repurchased $150 million, or 2 million shares, of common stock during the first quarter of 2026. It also increased its share repurchase authorization by $600 million, bringing the total capacity to $690 million at the quarter-end
BFH’s 2026 Guidance
Management expects average loan growth to increase year over year at a low-single-digit rate.
It expects total revenues to grow at a low-single-digit pace, broadly in line with loan growth.
The net loss rate is expected to be 7.2-7.4%.
The effective tax rate is anticipated to be 25-27%, with some quarterly variability.
Synchrony Financial (SYF - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.27, in line with the Zacks Consensus Estimate. The bottom line increased 20.1% year over year.
Net interest income reached $4.64 billion, up 3.8% from the prior-year period but missed the consensus estimate by 0.5%.
Upcoming Releases
Virtu Financial (VIRT - Free Report) is set to report first-quarter 2026 results on April 29, before market open. The Zacks Consensus Estimate for 2026 earnings is pegged at $5.62 per share, reflecting four upward revisions and no downward revisions over the past 30 days.
The consensus estimate for 2026 revenues is pinned at $2.05 billion. VIRT surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 18.6%.
Atlantic Real Estate (REFI - Free Report) is set to report first-quarter 2026 results on May 7, before market open. The Zacks Consensus Estimate for 2026 earnings is pegged at $1.91 per share, indicating a 1.6% year-over-year increase.
The consensus estimate for 2026 revenues is pinned at $53.8 million. REFI surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 6.1%.
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Bread Financial Q1 Earnings Beat Estimates on Higher Credit Sales
Key Takeaways
Bread Financial Holdings, Inc. (BFH - Free Report) reported first-quarter 2026 operating income of $4.18 per share, outperforming the Zacks Consensus Estimate by 39.3%. The bottom line rose 49% year over year.
Revenues increased 5% from the prior-year level to $1 billion, exceeding the consensus estimate by 1.1%. The solid performance reflected higher revenues, driven by pricing actions and increased credit sales, along with an improved net interest margin. However, gains were partially offset by elevated operating expenses and higher compensation costs.
Behind the Headlines
Credit sales of $6.5 billion increased 7% year over year, driven by new partner growth and increased general-purpose spending. Average loan increased 1% to $18.3 billion, and end-of-period loans rose 2% to $18.1 billion, supported by strong credit sales and partner expansion.
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 increased 2% to $1.2 billion, missing the Zacks Consensus Estimate by 0.4%, and our model estimate by 2.1%. The net interest margin improved 120 basis points to 19.3%, whereas the Zacks Consensus Estimate was pegged at 18.2%.
Total non-interest expenses decreased 1% to $472 million, aided by cost discipline and a data processing credit, partly offset by higher compensation costs. The delinquency rate of 5.6% improved from 5.9% year over year.
The net loss rate of 7.3% improved 83 basis points year over year. Pre-tax pre-provision earnings increased 11% year over year to $546 million.
Adjusted PPNR, a non-GAAP financial measure that excludes gains on portfolio sales and the impact of debt repurchases, increased 11% year over year to $546 million.
Financial Update
Bread Financial exited the first quarter 2026 with cash and cash equivalents of $3.6 billion, down 1% from the 2025-end level.
Tangible book value was $61.57 per share as of March 31, 2026, up 26% year over year. Return on average equity was 21.2%, which increased 350 basis points year over year.
Capital Deployment
BFH repurchased $150 million, or 2 million shares, of common stock during the first quarter of 2026. It also increased its share repurchase authorization by $600 million, bringing the total capacity to $690 million at the quarter-end
BFH’s 2026 Guidance
Management expects average loan growth to increase year over year at a low-single-digit rate.
It expects total revenues to grow at a low-single-digit pace, broadly in line with loan growth.
The net loss rate is expected to be 7.2-7.4%.
The effective tax rate is anticipated to be 25-27%, with some quarterly variability.
BFH’s Zacks Rank
Bread Financial currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Another Peer
Synchrony Financial (SYF - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.27, in line with the Zacks Consensus Estimate. The bottom line increased 20.1% year over year.
Net interest income reached $4.64 billion, up 3.8% from the prior-year period but missed the consensus estimate by 0.5%.
Upcoming Releases
Virtu Financial (VIRT - Free Report) is set to report first-quarter 2026 results on April 29, before market open. The Zacks Consensus Estimate for 2026 earnings is pegged at $5.62 per share, reflecting four upward revisions and no downward revisions over the past 30 days.
The consensus estimate for 2026 revenues is pinned at $2.05 billion. VIRT surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 18.6%.
Atlantic Real Estate (REFI - Free Report) is set to report first-quarter 2026 results on May 7, before market open. The Zacks Consensus Estimate for 2026 earnings is pegged at $1.91 per share, indicating a 1.6% year-over-year increase.
The consensus estimate for 2026 revenues is pinned at $53.8 million. REFI surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 6.1%.