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BFH beat Q2 earnings and revenue estimates on higher credit sales, loan growth and pricing actions.
Improved credit quality lifted margins, though higher credit-loss provisions and compensation costs weighed.
Share buybacks continued as management reaffirmed low- to mid-single-digit loan and revenue growth for 2026.
Bread Financial Holdings, Inc. (BFH - Free Report) reported second-quarter 2026 operating income of $3.55 per share, outperforming the Zacks Consensus Estimate by 40.9%. The bottom line rose 20.7% year over year.
Revenues increased 7% from the prior-year level to $993 million, exceeding the consensus estimate by 4.2%.
The solid performance reflected higher revenues driven by loan growth, pricing actions, lower interest expense and higher interchange and merchant fees, along with improved credit quality. However, the gains were partially offset by higher provision for credit losses and elevated compensation costs.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Credit sales of $7.5 billion increased 11% year over year, driven by growth in new partnerships and increased general-purpose spending. Average loans increased 3% to $18.2 billion, while end-of-period loans rose 5% to $18.5 billion, supported by strong credit sales and partner expansion.
Total interest income increased 3% to $1.2 billion, beating the Zacks Consensus Estimate by 0.8%, and our model estimate by 0.02%. The net interest margin improved 78 basis points to 18.5%, whereas the Zacks Consensus Estimate was pegged at 16.9%.
Total non-interest expenses remained flat year over year at $483 million, as higher employee compensation and benefits costs were offset by the prior-year impact of debt repurchases. The delinquency rate of 5.7% improved from 5.2% year over year.
The net loss rate of 6.9% improved 90 basis points year over year. Pre-tax pre-provision earnings increased 14% year over year to $510 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 $510 million.
BFH’s Financial Update
Bread Financial exited the second quarter of 2026 with cash and cash equivalents of $3.6 billion, largely unchanged from the 2025-end level.
Tangible book value was $63.66 per share as of June 30, 2026, up 22% year over year. Return on average equity was 17.1%, which decreased 40 basis points year over year.
BFH's Capital Deployment
BFH repurchased 2.8 million shares of common stock for $241 million during the second quarter of 2026. It ended the second quarter with $449 million remaining under its share repurchase authorization.
BFH’s Offers 2026 Guidance
Management expects average loan growth to increase year over year at a low- to mid-single-digit rate.
It expects total revenues to grow at a low- to mid-single-digit pace, broadly in line with loan growth.
The net loss rate is expected to be 7-7.1%.
The effective tax rate is anticipated to be 25-27%, with some quarterly variability.
Synchrony Financial (SYF - Free Report) reported second-quarter 2026 adjusted earnings per share (EPS) of $2.59, which surpassed the Zacks Consensus Estimate by 24.5%. The bottom line increased 3.6% year over year.
Net interest income increased 1.9% year over year to $4.6 billion but missed the consensus estimate by 1.1%.
Upcoming Releases
Alerus Financial (ALRS - Free Report) is set to report second-quarter 2026 results on July 29, after the market closes.
The Zacks Consensus Estimate for earnings is pegged at 78 cents per share, which has witnessed one upward revision in the past 60 days, with no movement in the opposite direction. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 35.8%. The consensus estimate for Alerus Financial’s second-quarter revenues is pinned at $76.85 million.
Acadian Asset Management Inc. (AAMI - Free Report) is set to report second-quarter 2026 results on July 30, before the market opens.
The Zacks Consensus Estimate for earnings is pegged at $1.05 per share, which has witnessed one upward revision in the past 60 days, with no movement in the opposite direction. The company beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 8.6%. The consensus estimate for Acadian Asset Management’s second-quarter revenues is pinned at $179.43 million.
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BFH Q2 Earnings Beat Estimates on Solid Credit Sales, Revenues Rise Y/Y
Key Takeaways
Bread Financial Holdings, Inc. (BFH - Free Report) reported second-quarter 2026 operating income of $3.55 per share, outperforming the Zacks Consensus Estimate by 40.9%. The bottom line rose 20.7% year over year.
Revenues increased 7% from the prior-year level to $993 million, exceeding the consensus estimate by 4.2%.
The solid performance reflected higher revenues driven by loan growth, pricing actions, lower interest expense and higher interchange and merchant fees, along with improved credit quality. However, the gains were partially offset by higher provision for credit losses and elevated compensation costs.
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 $7.5 billion increased 11% year over year, driven by growth in new partnerships and increased general-purpose spending. Average loans increased 3% to $18.2 billion, while end-of-period loans rose 5% to $18.5 billion, supported by strong credit sales and partner expansion.
Total interest income increased 3% to $1.2 billion, beating the Zacks Consensus Estimate by 0.8%, and our model estimate by 0.02%. The net interest margin improved 78 basis points to 18.5%, whereas the Zacks Consensus Estimate was pegged at 16.9%.
Total non-interest expenses remained flat year over year at $483 million, as higher employee compensation and benefits costs were offset by the prior-year impact of debt repurchases. The delinquency rate of 5.7% improved from 5.2% year over year.
The net loss rate of 6.9% improved 90 basis points year over year. Pre-tax pre-provision earnings increased 14% year over year to $510 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 $510 million.
BFH’s Financial Update
Bread Financial exited the second quarter of 2026 with cash and cash equivalents of $3.6 billion, largely unchanged from the 2025-end level.
Tangible book value was $63.66 per share as of June 30, 2026, up 22% year over year. Return on average equity was 17.1%, which decreased 40 basis points year over year.
BFH's Capital Deployment
BFH repurchased 2.8 million shares of common stock for $241 million during the second quarter of 2026. It ended the second quarter with $449 million remaining under its share repurchase authorization.
BFH’s Offers 2026 Guidance
Management expects average loan growth to increase year over year at a low- to mid-single-digit rate.
It expects total revenues to grow at a low- to mid-single-digit pace, broadly in line with loan growth.
The net loss rate is expected to be 7-7.1%.
The effective tax rate is anticipated to be 25-27%, with some quarterly variability.
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.
Performance of Other Peers
Synchrony Financial (SYF - Free Report) reported second-quarter 2026 adjusted earnings per share (EPS) of $2.59, which surpassed the Zacks Consensus Estimate by 24.5%. The bottom line increased 3.6% year over year.
Net interest income increased 1.9% year over year to $4.6 billion but missed the consensus estimate by 1.1%.
Upcoming Releases
Alerus Financial (ALRS - Free Report) is set to report second-quarter 2026 results on July 29, after the market closes.
The Zacks Consensus Estimate for earnings is pegged at 78 cents per share, which has witnessed one upward revision in the past 60 days, with no movement in the opposite direction. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 35.8%. The consensus estimate for Alerus Financial’s second-quarter revenues is pinned at $76.85 million.
Acadian Asset Management Inc. (AAMI - Free Report) is set to report second-quarter 2026 results on July 30, before the market opens.
The Zacks Consensus Estimate for earnings is pegged at $1.05 per share, which has witnessed one upward revision in the past 60 days, with no movement in the opposite direction. The company beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 8.6%. The consensus estimate for Acadian Asset Management’s second-quarter revenues is pinned at $179.43 million.