Alliance Data Systems-Bread Financial Q1 Earnings, Revenues Top Estimates, Credit Sales Rise

Core Insights - Bread Financial Holdings (BFH) reported an operating income of $2.86 per share for Q1 2025, exceeding the Zacks Consensus Estimate by 36.2% and reflecting a 4.8% year-over-year improvement [1] - Despite a revenue decline, credit sales increased by 1% to$ 6.1 billion, driven by higher general-purpose spending and transaction volume [3] Revenue Performance - Revenues decreased by 2.1% year over year to $970 million, primarily due to lower finance charges and late fees, but still beat the consensus estimate by 1.3% [2] - Total interest income fell by 5.3% to$ 1.2 billion, missing the consensus estimate of $1.3 billion [4] Credit and Loan Metrics - Average loans decreased by 2% to$ 18.2 billion, attributed to a challenging macroeconomic environment [3] - The delinquency rate improved to 5.9%, while the net loss rate also improved to 8.2% [4] Financial Position - As of March 31, 2025, cash and cash equivalents increased by 14.4% to $4.2 billion, while long-term debt rose by 28.7% to$ 1.3 billion [6] - Tangible book value per share increased by 6% year over year to $48.91 [6] Operational Efficiency - Cash from operations decreased by 12.1% year over year to$ 393 million [7] - Total non-interest expenses decreased by 1% to $477 million, mainly due to lower other expenses [4] Capital Management - BFH repurchased$ 102 million worth of shares in Q1 2025, totaling 3.2 million shares after additional repurchases in April [8] Future Guidance - Management anticipates average receivables to be slightly down from 2024, with total revenues expected to be flat to slightly up [10]