Company Performance - Bread Financial Holdings (BFH) reported quarterly earnings of $3.14 per share, exceeding the Zacks Consensus Estimate of $1.85 per share, and up from $2.66 per share a year ago, representing an earnings surprise of +69.73% [1][2] - The company posted revenues of $929 million for the quarter ended June 2025, which was a slight miss compared to the Zacks Consensus Estimate by 0.92%, and down from $939 million year-over-year [3] - Over the last four quarters, Bread Financial has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2][3] Market Performance - Bread Financial shares have increased by approximately 5.1% since the beginning of the year, while the S&P 500 has gained 8.1% [4] - The current Zacks Rank for Bread Financial is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.17 on revenues of $988.48 million, and for the current fiscal year, it is $7.17 on revenues of $3.88 billion [8] - The estimate revisions trend for Bread Financial was mixed ahead of the earnings release, and future changes in estimates will be closely monitored [5][7] Industry Context - The Financial - Miscellaneous Services industry, to which Bread Financial belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Performance - Net income was $139 million, with earnings per diluted share at $2.94[6] - Adjusted net income reached $149 million, and adjusted earnings per diluted share were $3.15, excluding a $10 million post-tax impact from repurchased debt[6] - Revenue totaled $0.9 billion[7] - Credit sales increased by 4% to $6.8 billion, driven by new partner growth and increased general-purpose spending[11] Capital and Funding - Direct-to-consumer deposits increased by 12% year-over-year to $8.1 billion, representing 45% of average total funding[6] - Tangible book value per common share increased by 7% year-over-year to $52.21[6] - Completed a $150 million tender offer for 9.75% senior notes due 2029[6] - CET1 capital ratio was 13.0%[17] - Total risk-based capital ratio was 16.5%[17] Credit Quality - The delinquency rate decreased to 5.7% from 6.0% in the second quarter of 2024[11] - The net loss rate decreased to 7.9% from 8.6% in the second quarter of 2024[11]

Core Insights - Bread Financial Holdings, Inc. reported a net loss rate of 7.8% for the three months ended June 30, 2025, slightly down from 7.9% in the previous year [1] - The delinquency rate improved to 5.7% as of June 30, 2025, compared to 6.0% a year earlier [1] - The company experienced a year-over-year decline of 1% in average credit card and other loans, totaling $17.631 billion [1] Financial Performance - End-of-period credit card and other loans stood at $17.656 billion as of June 30, 2025 [1] - Net principal losses for the quarter were reported at $113 million, with a total of $348 million for the year [1] - The company noted that the impact of hurricanes Helene and Milton led to a temporary freeze on delinquency progression, affecting net principal losses and loss rates in the second quarter of 2025 [1] Company Overview - Bread Financial is a tech-forward financial services company providing personalized payment, lending, and saving solutions to millions of U.S. consumers [2] - The company offers general purpose credit cards and savings products, aiming to empower customers and enhance their quality of life [2] - Bread Financial collaborates with recognized brands in various sectors, including travel, health, and specialty apparel, through private label and co-brand credit cards [2]

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20quarter%202025%20results) Bread Financial reported Q2 2025 net income of $139 million, improved credit quality, and executed significant capital allocation initiatives [Second Quarter 2025 Key Highlights](index=2&type=section&id=Second%20quarter%202025%20Key%20Highlights) Bread Financial reported Q2 2025 net income of $139 million, improved credit quality, and completed capital allocation programs Q2 2025 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Income | $139 million | +4% | | Diluted EPS | $2.93 | +11% | | Adjusted Net Income(1) | $149 million | +12% | | Adjusted Diluted EPS(1) | $3.14 | +18% | | Revenue | $0.9 billion | -1% | | Credit Sales | $6.8 billion | +4% | | Average Loans | $17.7 billion | -1% | | Delinquency Rate | 5.7% | -0.3 ppt | | Net Loss Rate | 7.9% | -0.7 ppt | - Completed a **$150 million** board-authorized share repurchase program, with **3.2 million shares** repurchased year-to-date[5](index=5&type=chunk) - Completed a **$150 million** tender offer for its 9.75% senior notes due 2029, resulting in **$13 million** in debt extinguishment costs[5](index=5&type=chunk)[11](index=11&type=chunk) - Renewed a long-term partnership with Caesars Entertainment and launched a new, fee-based credit card[5](index=5&type=chunk) - Direct-to-consumer deposits grew **12%** year-over-year to **$8.1 billion**, now representing **45%** of average total funding[5](index=5&type=chunk) [Financial Performance Analysis](index=4&type=section&id=Financial%20Performance%20Analysis) Q2 2025 financial performance analysis covers P&L, net interest margin, funding, capital, liquidity, and credit quality metrics [Summary P&L Results](index=4&type=section&id=Summary%20P%26L%20results) For Q2 2025, revenue decreased by 1% year-over-year to $929 million, while net income increased by 4% to $139 million Q2 2025 vs Q2 2024 Profit & Loss Statement | ($ in millions) | 2Q25 | 2Q24 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $929 | $939 | -1% | | Provision for credit losses | $274 | $290 | -6% | | Total non-interest expenses | $481 | $469 | +3% | | Income before income taxes | $174 | $180 | -3% | | Net income | $139 | $133 | +4% | YTD 2025 vs YTD 2024 Profit & Loss Statement | ($ in millions) | YTD '25 | YTD '24 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1,899 | $1,929 | -2% | | Provision for credit losses | $570 | $611 | -7% | | Total non-interest expenses | $958 | $949 | +1% | | Net income | $280 | $269 | +4% | - Adjusted Pre-tax Pre-provision Net Revenue (PPNR) was **$458 million** in Q2 2025, a slight decrease of **1%** from **$465 million** in Q2 2024[12](index=12&type=chunk)[13](index=13&type=chunk) [Net Interest Margin](index=5&type=section&id=Net%20interest%20margin) The net interest margin for Q2 2025 was 17.7%, a slight decrease from 18.0% in Q2 2024, with direct-to-consumer deposits comprising 45% of average interest-bearing liabilities Key Margin and Yield Metrics | Metric | 2Q25 (%) | 2Q24 (%) | Change (ppt) | | :--- | :--- | :--- | :--- | | Net Interest Margin | 17.7% | 18.0% | -0.3 ppt | | Loan Yield | 26.0% | 26.4% | -0.4 ppt | | Avg. Earning Asset Yield | 21.7% | 22.0% | -0.3 ppt | | Cost of Total Interest-Bearing Liabilities | 4.9% | 5.4% | -0.5 ppt | - The funding mix has evolved, with direct-to-consumer deposits increasing to **45%** of average interest-bearing liabilities in Q2 2025, up from **40%** in Q2 2024[16](index=16&type=chunk) [Funding, Capital, and Liquidity](index=6&type=section&id=Funding%2C%20capital%20and%20liquidity) The company maintained a robust capital and liquidity position in Q2 2025, with a CET1 ratio of 13.0% and stable total liquid resources of $7.7 billion Capital Ratios | Ratio | 2Q25 (%) | 2Q24 (%) | | :--- | :--- | :--- | | CET1 Capital Ratio | 13.0% | 13.8% | | Tier 1 Capital Ratio | 13.0% | 13.8% | | Total Risk-Based Capital Ratio | 16.5% | 15.1% | | TCE + Credit Reserve Rate(1) | 25.7% | 25.9% | - The CET1 ratio decreased from **13.8%** in Q2 2024 to **13.0%** in Q2 2025, primarily impacted by share repurchases (**-1.1%**) and repurchased debt (**-1.1%**), partially offset by net earnings (**+2.2%**)[19](index=19&type=chunk) - Total end-of-period liquid resources stood at **$7.7 billion**, representing **35.1%** of total assets[18](index=18&type=chunk) [Credit Quality and Allowance](index=7&type=section&id=Credit%20quality%20and%20allowance) Credit quality metrics improved year-over-year in Q2 2025, with the delinquency rate declining to 5.7% and the net loss rate decreasing to 7.9% Credit Quality Metrics | Metric | 2Q25 (%) | 2Q24 (%) | Change (ppt) | | :--- | :--- | :--- | :--- | | Delinquency Rate | 5.7% | 6.0% | -0.3 ppt | | Net Loss Rate | 7.9% | 8.6% | -0.7 ppt | Allowance for Credit Losses (ACL) | Metric | 2Q25 ($ in millions) | 2Q24 ($ in millions) | | :--- | :--- | :--- | | ACL Balance | $2,098 million | $2,172 million | | Reserve Rate | 11.9% | 12.2% | - The revolving credit risk distribution remained consistent, with **58%** of the portfolio having a VantageScore greater than 660, **27%** between 601-660, and **15%** at 600 or below[23](index=23&type=chunk) [2025 Financial Outlook](index=8&type=section&id=2025%20financial%20outlook) Bread Financial provided its full-year 2025 outlook, anticipating average loans to be flat to slightly down compared to 2024, with revenue relatively flat and an improved net loss rate [Full Year 2025 Guidance](index=8&type=section&id=Full%20Year%202025%20Guidance) The company projects flat to slightly down average loans for 2025, with flat revenue, targeted positive operating leverage, and an improved net loss rate between 7.8% and 7.9% Full Year 2025 Financial Outlook | Metric | Full Year 2024 Actuals ($ in millions) | Full Year 2025 Outlook | | :--- | :--- | :--- | | Average loans | $18,084 million | Flat to slightly down | | Revenue (excl. gain on sale) | $3,827 million | Flat | | Adjusted total non-interest expenses | $1,943 million | Positive operating leverage | | Net loss rate | 8.2% | 7.8% to 7.9% | [Appendix](index=9&type=section&id=Appendix) The appendix details strategic focus, comprehensive financial tables, and non-GAAP reconciliations for in-depth analysis [Strategic Focus and Portfolio Details](index=10&type=section&id=Strategic%20Focus%20and%20Portfolio%20Details) The appendix details the company's four strategic focus areas for 2025, explains the 3% YoY rise in non-interest expenses, and illustrates the loan portfolio's diversification - The company's 2025 strategic pillars are: Responsible growth, Managing the macroeconomic and regulatory environment, Disciplined capital allocation and risk management, and Operational excellence[29](index=29&type=chunk)[30](index=30&type=chunk) - Total non-interest expenses increased **3%** YoY in Q2 2025[33](index=33&type=chunk)[35](index=35&type=chunk) - The loan portfolio is diversified by product, with co-brand cards accounting for **54%** of credit sales and **55%** of end-of-period loans in Q2 2025[40](index=40&type=chunk) [Detailed Financial Tables](index=13&type=section&id=Detailed%20Financial%20Tables) This section provides extensive historical financial data, including summary financial highlights, quarterly trending data, detailed net interest margin calculations, and historical capital and credit quality trends - Provides a comprehensive summary of financial highlights for Q2'25, comparing YoY, QoQ, and YTD performance across sales, loans, deposits, returns, margins, capital, and credit rates[43](index=43&type=chunk) - Includes detailed quarterly trending data from Q2 2023 to Q2 2025 for P&L results, financial highlights, capital ratios, and credit quality, allowing for in-depth trend analysis[45](index=45&type=chunk)[47](index=47&type=chunk)[51](index=51&type=chunk) - A detailed table breaks down the components of the Q2 2025 Net Interest Margin, showing average balances, interest income/expense, and average yields for all interest-earning assets and interest-bearing liabilities[49](index=49&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=22&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines non-GAAP financial measures like Adjusted Net Income and PPNR, and provides detailed reconciliation tables to their most directly comparable GAAP measures for historical periods - Defines key non-GAAP metrics used by management to evaluate performance, including Adjusted Net Income (excluding debt repurchase impacts), PPNR, ROTCE, and Tangible Book Value per common share[65](index=65&type=chunk)[66](index=66&type=chunk) - Presents detailed tables reconciling GAAP to Non-GAAP financial measures, including Total non-interest expenses, Net income, EPS, and PPNR, for quarterly periods from Q2 2023 to Q2 2025[67](index=67&type=chunk)[69](index=69&type=chunk)

Core Insights - Bread Financial Holdings, Inc. reported its second quarter 2025 financial results, emphasizing its position as a tech-forward financial services company [1] - The company provides a range of payment, lending, and saving solutions tailored to U.S. consumers, enhancing customer experience and brand partnerships [3] Financial Performance - The financial results for the second quarter of 2025 were announced, with all related materials available on the investor relations website [1] - A conference call was scheduled to discuss these results, indicating a commitment to transparency and investor engagement [2] Company Overview - Bread Financial specializes in personalized financial solutions, including general purpose credit cards and savings products, aimed at improving customers' financial well-being [3] - The company collaborates with well-known brands across various sectors, including travel, entertainment, health, beauty, jewelry, and specialty apparel, through private label and co-brand credit card offerings [3]

Core Points - Bread Financial Holdings, Inc. has initiated cash tender offers to purchase up to $150 million of its Senior Notes and Subordinated Notes [1] - The tender offers are subject to specific sublimits for each series of notes, with a maximum of $100 million for the 2029 Notes and $50 million for the 2035 Notes [1] - The tender offers will expire on August 21, 2025, with an early participation deadline on August 6, 2025 [2] Tender Offer Details - The total consideration for each $1,000 principal amount of notes will be determined through a modified "Dutch Auction" procedure [3] - Holders who tender their notes before the early participation deadline will receive an additional $50 for each $1,000 principal amount [3][11] - The expected final payment date for accepted notes is August 26, 2025 [3] Participation and Bidding - Holders can specify a minimum bid price for their notes, which must be within a defined range and in increments of $1.25 [4] - The aggregate principal amount of notes accepted may be subject to proration if the total validly tendered exceeds the applicable sublimits [6] Withdrawal and Conditions - Notes can be withdrawn until the withdrawal date of August 6, 2025 [7] - The tender offers are subject to various conditions that may be waived or modified by the company [8] Management and Agents - J.P. Morgan Securities LLC is the lead dealer manager for the tender offers, with several co-dealer managers assisting [9] - D.F. King, Inc. serves as the information and tender agent for the offers [9]

Core Insights - Caesars Entertainment is launching a new premium credit card, the Caesars Rewards Prestige Visa Signature, in partnership with Bread Financial, aimed at enhancing customer experience and loyalty [1][2][3] Group 1: Credit Card Features - The Caesars Rewards Prestige Visa Signature credit card has a $149 annual fee and offers up to $450 in annual value through various perks [1][2] - Cardmembers can earn rewards on everyday purchases and unlock exclusive benefits in travel, entertainment, dining, and gaming [2][3] - The card includes a complimentary hotel night upon anniversary (up to $300), $50 Slot Play, and $100 Caesars dining credit [4] Group 2: Tier Credits and Bonuses - New cardholders can earn up to 25,000 additional Tier Credits in their first year, accelerating their progress in the Caesars Rewards loyalty program [2][5] - The card provides multiple opportunities for earning Tier Credits, including bonuses for spending outside Caesars Rewards destinations [5] Group 3: Company Background - Caesars Entertainment is the largest casino entertainment company in the U.S., operating under various brand names and offering a wide range of gaming and hospitality services [7] - The company focuses on enhancing guest value through its Caesars Rewards loyalty program and a commitment to operational excellence and technology leadership [7] Group 4: Partner Company Overview - Bread Financial is a tech-forward financial services company that provides personalized payment and lending solutions, enhancing customer experiences in various sectors [8]

Core Viewpoint - Bread Financial Holdings (BFH) is highlighted as a strong candidate for investors due to its consistent performance in beating earnings estimates and its positive outlook for future earnings reports [1]. Earnings Performance - The company has a solid track record of exceeding earnings estimates, with an average surprise of 30.22% over the last two quarters [2]. - For the last reported quarter, Bread Financial achieved earnings of $2.86 per share, surpassing the Zacks Consensus Estimate of $2.1 per share by 36.19% [3]. - In the previous quarter, the company was expected to earn $0.33 per share but delivered $0.41 per share, resulting in a surprise of 24.24% [3]. Earnings Estimates and Predictions - Recent estimates for Bread Financial have been trending upward, indicating a positive outlook for the company's earnings [5]. - The Zacks Earnings ESP (Expected Surprise Prediction) for Bread Financial is currently positive, suggesting a strong likelihood of an earnings beat [5][8]. - The company has an Earnings ESP of +1.98%, reflecting increased analyst optimism regarding its earnings prospects [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more reflective of recent analyst revisions [7]. Upcoming Earnings Report - The next earnings report for Bread Financial is anticipated to be released on July 24, 2025 [8].

Core Insights - Bread Financial Holdings, Inc. is set to host a conference call on July 24, 2025, at 8:30 a.m. ET to discuss its second quarter 2025 results [1] - The company is recognized as a tech-forward financial services provider, offering personalized payment, lending, and saving solutions [3] Company Overview - Bread Financial provides payment solutions, including general purpose credit cards and savings products, aimed at enhancing customer experiences [3] - The company supports growth for well-known brands in various sectors such as travel & entertainment, health & beauty, jewelry, and specialty apparel through private label and co-brand credit cards [3] Conference Call Details - Participants can register in advance for the conference call, which will also feature accompanying slides [2] - The webcast will be archived on the company's investor relations website for future access [2]

Core Insights - The rising trend of bankruptcy filings among consumers with retail credit card debt is linked to record-high interest rates, which have reached an average of 30.45% as of September [2][3] - The proportion of bankruptcy filings that include retail credit card debt has increased at a faster rate than overall new filings, with a 12% rise in such cases compared to a 5.8% increase in total consumer bankruptcy filings between 2023 and 2024 [3] Industry Context - Retail credit cards typically have higher interest rates than traditional credit cards due to the lower credit scores of their holders, making them riskier for banks [1] - The increase in interest rates was influenced by banks anticipating regulatory changes regarding credit card late fees, which ultimately did not take effect, leading to sustained high rates [2] - The Consumer Bankers Association emphasized the role of retail credit cards in helping consumers manage expenses and build credit, while also highlighting the availability of various financial tools for consumers [4]