Key Takeaways Q3 earnings season opens strong, led by Finance sector gains despite economic headwinds.Broker-backed picks--PARR, CPS, BFH, AAL, CVI--stand out for rising estimates and solid fundamentals.Screen favors stocks with improved broker views, estimate revisions and strong price/sales metrics.The third-quarter earnings season is in its nascent stage. However, the start has been highly impressive, led by players from the Finance sector. The rosy beginning has propelled equity markets northward despit ...

Key Takeaways BFH posted Q3 operating income of $4.02 per share, topping estimates by 90.5%. Higher credit sales and lower non-interest expenses drove strong year-over-year profit growth. The board hiked dividend by 10% and expanded share repurchase authorization to $340 million. Bread Financial Holdings’ (BFH) operating income of $4.02 per share for the third quarter of 2025 beat the Zacks Consensus Estimate by 90.5%. The bottom line more than doubled year over year. The quarterly results reflected higher ...

Core Insights - Bread Financial Holdings (BFH) reported $971 million in revenue for Q3 2025, a year-over-year decline of 1.2% [1] - The company achieved an EPS of $4.02, significantly up from $1.84 a year ago, resulting in an EPS surprise of +90.52% compared to the consensus estimate of $2.11 [1] Financial Performance Metrics - Efficiency Ratio stood at 49%, better than the three-analyst average estimate of 53% [4] - Net loss rate was 7.4%, slightly better than the average estimate of 7.6% [4] - Net Interest Margin was reported at 18.8%, exceeding the average estimate of 18.2% [4] - Total interest income matched the estimate at $1.24 billion [4] - Interest on cash and investment securities was $44 million, below the average estimate of $48.32 million [4] - Interchange revenue was reported at -$111 million, worse than the average estimate of -$102.99 million [4] - Interest and fees on loans reached $1.2 billion, slightly above the average estimate of $1.19 billion [4] - Net interest income was $1.03 billion, surpassing the average estimate of $1.02 billion [4] - Total non-interest income was -$61 million, worse than the average estimate of -$53.03 million [4] - Other income was reported at $50 million, slightly above the average estimate of $49.18 million [4] Stock Performance - Shares of Bread Financial have returned -0.3% over the past month, compared to the Zacks S&P 500 composite's +0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Bread Financial (NYSE:BFH) Q3 2025 Earnings Call October 23, 2025 08:30 AM ET Company ParticipantsPerry Beberman - EVP and CFORalph Andretta - President and CEOBrian Vereb - Head of Investor RelationsJeff Adelson - Executive DirectorConference Call ParticipantsSanjay Sakhrani - Managing Director and Senior AnalystVincent Caintic - Managing Director and Specialty Finance AnalystRichie Smith - Business AnalystMoshe Orenbuch - Managing Director and Senior AnalystDominick Gabriele - Managing Director and Senior ...

Bread Financial (NYSE:BFH) Q3 2025 Earnings Call October 23, 2025 08:30 AM ET Company ParticipantsPerry Beberman - EVP and CFORalph Andretta - President and CEOBrian Vereb - Head of Investor RelationsJeff Adelson - Executive DirectorConference Call ParticipantsSanjay Sakhrani - Managing Director and Senior AnalystVincent Caintic - Managing Director and Specialty Finance AnalystRichie Smith - Business AnalystMoshe Orenbuch - Managing Director and Senior AnalystDominick Gabriele - Managing Director and Senior ...

Financial Data and Key Metrics Changes - The company reported net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share at $4.02, excluding a $3 million post-tax impact from repurchased debt expenses [4][5] - Tangible book value per common share increased by 19% year over year to $56.36, and return on average tangible common equity was 28.6% for the quarter [4][5] - Credit sales rose by 5% year over year to $6.8 billion, despite a decrease in average loans by 1% year over year to $17.6 billion [11][12] Business Line Data and Key Metrics Changes - Revenue decreased by 1% year over year to $971 million, impacted by lower billed late fees and higher retailer share arrangements [11][12] - Total non-interest expenses decreased by $98 million, with adjusted total non-interest expenses down 1% year over year [12][13] - The company experienced a decrease in net interest income by 1% year over year, attributed to lower billed late fees and a shift in risk and product mix [13][16] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6.0%, down 40 basis points year over year, while the net loss rate was 7.4%, also down 40 basis points year over year [20][21] - Direct-to-consumer deposits grew to $8.2 billion, accounting for 47% of average funding, up from 41% a year ago [17][18] - The CET1 ratio improved to 14.0%, up 100 basis points sequentially and 70 basis points year over year [18][19] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy while investing in technology modernization and product innovation [6][7] - New brand partnerships in the home vertical, including Bed Bath & Beyond and Raymour & Flanagan, are expected to drive future growth [9][10] - The company aims to maintain expense discipline and operational excellence, with a commitment to returning value to shareholders through increased dividends and share repurchases [8][10] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer financial health remained resilient, with strong credit sales and lower delinquencies despite ongoing inflationary concerns [4][5] - The outlook for the remainder of the year remains unchanged, with expectations for credit sales trends to continue positively [6][24] - Management expressed confidence in achieving full-year positive operating leverage and maintaining a net loss rate within the guided range of 7.8% to 7.9% [24][25] Other Important Information - The company announced a $200 million increase to its share repurchase authorization and a 10% increase in its quarterly cash dividend to $0.23 per common share [8][20] - A credit rating upgrade and positive outlook from Moody's were recognized, reflecting improvements in financial resilience and risk management [10][18] Q&A Session Summary Question: Signs of weakness in the portfolio - Management indicated that consumer metrics have been surprisingly resilient, with stable macro conditions and no significant signs of weakness in their portfolio [28][29] Question: Loan growth expectations - Management expects loan growth to pick up as credit quality improves and new partnerships are established, indicating a healthy consumer environment [34] Question: Trends in credit sales and holiday shopping - Management noted that credit sales are currently positive, with expectations for aggressive retailer promotions during the holiday season to attract consumers [46] Question: Impact of discounts on Bread Financial - Management anticipates that retailers will likely push discounts earlier in the buying cycle, which could influence consumer spending behavior [71] Question: Underwriting standards and growth - Management confirmed that underwriting remains prudent and focused on profitability, with gradual adjustments based on improving credit quality and macroeconomic conditions [75][76]

Financial Data and Key Metrics Changes - The company reported net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share of $4.2, excluding a $3 million post-tax impact from debt repurchase expenses [3][4] - Tangible book value per common share increased by 19% year over year to $56.36, and return on average tangible common equity was 28.6% for the quarter [3][4] - Total sales for the quarter were $6.8 billion, a 5% increase year over year, driven by new partner growth and higher general purpose spending [10][11] Business Line Data and Key Metrics Changes - Credit sales increased by 5% year over year, supported by strong back-to-school shopping, particularly in apparel and beauty [4][10] - Average loans decreased by 1% year over year to $17.6 billion, influenced by higher payment rates and elevated gross credit losses [11][12] - Non-interest income decreased by $7 million year over year, primarily due to higher retailer share arrangements [13] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6%, down 40 basis points year over year, while the net loss rate was 7.4%, also down 40 basis points year over year [20] - The reserve rate improved to 11.7% at quarter end, reflecting better credit metrics and higher quality new vintages [21][22] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy, with ongoing investments in technology modernization and product innovation [6][8] - A $200 million share repurchase program was initiated, with a 10% increase in the quarterly cash dividend to $0.23 per common share [7][19] - The company aims to leverage its full product suite and omnichannel customer experience to extend category leadership while expanding into new verticals [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer financial health, despite ongoing inflationary concerns and a stable job market [4][5] - The company anticipates a gradual improvement in credit metrics and expects to achieve a full-year net loss rate in the guided range of 7.8% to 7.9% [24][25] - Management remains cautious about macroeconomic uncertainties, including inflation and consumer sentiment, while monitoring these trends closely [23][30] Other Important Information - The company received a credit ratings upgrade and positive outlook from Moody's, recognizing its progress in financial resilience and risk management [9][16] - Direct to consumer deposits accounted for 47% of average funding, up from 41% a year ago, enhancing the funding mix [16][17] Q&A Session Summary Question: Have you seen any signs of weakness in your portfolio? - Management noted that consumer metrics have been surprisingly resilient, with stable gradual improvement across all credit bands, and no significant cracks observed in the portfolio [30][33] Question: What is the outlook for loan growth? - Management indicated that with credit sales moving in the right direction and new partnerships being signed, loan growth is expected to pick up going forward [39][40] Question: How do you expect credit sales to trend in Q4 and into 2026? - Management expects credit sales to remain positive, with retailers likely to offer discounts and promotions to attract consumers during the holiday season [56][57] Question: What is the company's approach to AI and automation? - The company views AI as an opportunity to enhance operational excellence, improve efficiency, and drive growth, with over 200 machine learning models already in use [88][90]

Core Insights - Bread Financial Holdings (BFH) reported quarterly earnings of $4.02 per share, significantly exceeding the Zacks Consensus Estimate of $2.11 per share, and up from $1.84 per share a year ago [1][2] - The earnings surprise for this quarter was +90.52%, following a previous surprise of +69.73% in the last quarter [2] - The company generated revenues of $971 million for the quarter ended September 2025, slightly surpassing the Zacks Consensus Estimate by 0.46%, but down from $983 million year-over-year [3] Earnings Performance - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $958.53 million, and for the current fiscal year, it is $8.33 on revenues of $3.87 billion [8] Stock Performance and Outlook - Bread Financial shares have declined approximately 0.9% year-to-date, contrasting with the S&P 500's gain of 13.9% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Financial - Miscellaneous Services industry, to which Bread Financial belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Another company in the same industry, Sachem Capital Corp. (SACH), is expected to report quarterly earnings of $0.01 per share, reflecting a year-over-year increase of +107.7% [10]

Third quarter 2025 results October 23, 2025 © 2 0 2 2 B r e a d F i n a n c i a l | C o n f i d e n t i a l & P r o p r i e t a r y 1 Key highlights Third quarter 2025 Demonstrated financial resilience and strategic capital allocation Proactive risk management given macroeconomic uncertainty (1) Represents a Non-GAAP financial measure. See "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures". ©2025 Bread Financial 2 • Enhanced financial resilience through ongoing operati ...

Financial Performance - Net income for Q3 2025 was $188 million, with earnings per diluted share of $3.96, reflecting a favorable discrete tax item of $38 million[7]. - Adjusted net income for Q3 2025 was $191 million, compared to $93 million in Q3 2024, representing a significant increase of 105% year-over-year[68]. - The company reported a net income of $188 million for Q3 2025, compared to $2 million in Q3 2024, marking a substantial increase[68]. - Net income for Q3 2023 was $173 million, with earnings per diluted share at $3.46[47]. - The return on average assets rose significantly to 3.4% in Q3 25 from 0.1% in Q3 2024, showcasing improved profitability[43]. - The return on average equity for Q3 2023 was 24.8%, reflecting strong profitability[45]. - Adjusted earnings per diluted share for Q3 2025 were $4.02, compared to $1.83 in Q3 2024, reflecting a growth of approximately 120% year-over-year[68]. Credit and Delinquency Metrics - The delinquency rate improved to 6.0%, down from 6.4% in Q3 2024, while the net loss rate decreased to 7.4% from 7.8%[13]. - The delinquency rate improved to 6.0% in 3Q25 from 6.4% in 3Q24, indicating better credit performance[43]. - The net loss rate for 2025 is expected to improve to between 7.8% and 7.9%, down from 8.2% in 2024, due to resilient consumer behavior and effective credit management actions[26]. - Provision for credit losses for YTD 2025 was $869 million, down from $980 million in YTD 2024, indicating a decrease of about 11%[69]. - Delinquency rates peaked at 6.5% in 4Q21, with a 15-year average rate of approximately 4.9%[53]. - Net loss rates peaked at 8.9% in 4Q10, with a 15-year average rate of around 5.9%[53]. Capital and Equity - The CET1 capital ratio improved to 14.0% in Q3 2025, up from 13.3% in Q3 2024[20]. - Tangible book value per common share increased by $8.88, or 19%, year-over-year, reaching $56.36[7]. - Tangible book value per common share increased by 19% to $56.36 in 3Q25 from $47.48 in 3Q24[43]. - Tangible common equity over tangible assets (TCE/TA) is utilized to assess capital adequacy, with TCE for Q3 2025 at $2,594 million[69]. - Common equity tier 1 capital ratio for the total company was 12.9% in 3Q23, projected to decrease to 12.0% by 1Q25[50]. - Total risk-based capital ratio for the total company was 14.2% in 3Q23, expected to rise to 15.5% by 1Q25[50]. - Tangible common equity to tangible assets ratio was 10.0% in 3Q23, projected to reach 12.4% by 3Q25[50]. - Average tangible common equity for Q3 2025 was $2,607 million, an increase from $2,566 million in Q3 2024, showing a growth of approximately 2%[69]. Operational Efficiency - Total non-interest expenses decreased by $98 million, or 17%, primarily due to the prior year impact from repurchased debt[13]. - Total non-interest expenses decreased by 17% compared to 3Q24, reflecting strategic adjustments in employee compensation and benefits[34]. - Total non-interest expenses for Q3 2025 were $476 million, down from $574 million in Q3 2024, reflecting a decrease of approximately 17% year-over-year[68]. - The efficiency ratio improved to 49.0% in 3Q25, down from 58.4% in 3Q24, indicating enhanced operational efficiency[43]. - The efficiency ratio for Q3 2023 was 48.7%, indicating operational efficiency[45]. Revenue and Sales - Credit sales amounted to $6.8 billion, an increase of $0.3 billion or 5%, driven by new partner growth and increased general-purpose spending[13]. - Revenue for 2025, excluding any gain on portfolio sale, is expected to remain flat at $3,827 million, impacted by pricing changes and interest rate reductions by the Federal Reserve[26]. - Credit sales for Q3 2023 were $6,668 million, showing a year-over-year decline of 13%[45]. - Average credit card and other loans decreased by 8% year-over-year to $17,540 million in Q3 2023[45]. - Net interest income for Q3 2023 was $1,082 million, with total interest income at $1,301 million[47]. - The net interest margin for Q3 2025 is projected to be 18.8%[49]. Deposits - Direct-to-consumer deposits reached $8.2 billion, marking a 9% year-over-year increase and representing 47% of average total funding[7]. - End-of-period direct-to-consumer deposits increased by 9% to $8,188 million in 3Q25 compared to $7,483 million in 3Q24[43]. - End-of-period direct-to-consumer deposits increased by 18% year-over-year, reaching $6,098 million in Q3 2023[45]. Shareholder Returns - A quarterly cash dividend of $0.23 per common share was declared, representing a 10% increase from the prior quarter[7]. - The company announced a $200 million increase to its share repurchase authorization, bringing the total available for repurchases to $340 million[7]. Strategic Focus - The company plans to focus on responsible growth and disciplined capital allocation to manage macroeconomic and regulatory challenges in 2025[30]. - The company emphasizes the importance of forward-looking statements regarding future financial performance and market conditions[63]. - Non-GAAP financial measures are used to provide additional clarity in understanding operational results and trends[66].