Bread Financial (NYSE:BFH) Issues Quarterly Earnings Results, Beats Expectations By $1.67 EPS

Bread Financial (NYSE:BFH) released its earnings results on Thursday. The company reported $2.07 earnings per share for the quarter, beating analysts’ consensus estimates of $0.40 by $1.67, FiscalAI reports. The business had revenue of $975.00 million during the quarter, compared to the consensus estimate of $954.74 million. Bread Financial had a net margin of 11.02% and a return on equity of 17.92%. During the same quarter in the prior year, the firm posted $0.41 EPS.

Here are the key takeaways from Bread Financial’s conference call:

• Bread reported strong 2025 execution with multiple new brand signings (including Bed Bath & Beyond, Furniture First, Raymour & Flanigan and Crypto.com), a growing co‑brand mix that was 52% of Q4 credit sales, and continued direct‑to‑consumer deposit growth (up 11% YoY, now ~48% of funding).
• Credit metrics meaningfully improved — full‑year net loss rate was 7.7% (Q4: 7.4%) and the reserve rate improved to 11.2%, with management expecting a 2026 net loss range of 7.2%–7.4% and gradual movement toward their longer‑term ~6% target over time.
• Capital and funding were strengthened via opportunistic refinancing (paid down a 9.75% note and issued $500M at 6.75%), a Moody’s/Fitch upgrade, CET1 of 13.0%, issuance of $75M preferred, and $310M of common buybacks plus a 10% dividend increase — actions that lower funding costs and return capital to shareholders.
• Q4 GAAP earnings were pulled down by one‑time costs tied to debt repurchases (a $42M post‑tax impact and higher “other” expenses), creating near‑term earnings volatility despite the longer‑term funding benefits of the refinancing.
• 2026 guidance calls for low‑single‑digit loan and revenue growth, NIM near to slightly above 2025 but with a wide range due to potential Fed cuts, product‑mix and fee changes, and consumer behavior (e.g., tax refunds), so outcomes remain macro‑sensitive.

Bread Financial Trading Down 0.6%

NYSE BFH opened at $72.60 on Friday. Bread Financial has a 52 week low of $38.21 and a 52 week high of $82.03. The company has a market cap of $3.31 billion, a price-to-earnings ratio of 6.70, a P/E/G ratio of 0.49 and a beta of 1.27. The business has a 50 day moving average price of $73.11 and a 200-day moving average price of $65.54. The company has a quick ratio of 1.19, a current ratio of 1.17 and a debt-to-equity ratio of 0.27.

Bread Financial Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Monday, March 16th. Shareholders of record on Friday, February 27th will be paid a $0.23 dividend. This represents a $0.92 dividend on an annualized basis and a yield of 1.3%. The ex-dividend date of this dividend is Friday, February 27th. Bread Financial’s dividend payout ratio (DPR) is 8.49%.

Institutional Investors Weigh In On Bread Financial

Large investors have recently modified their holdings of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its holdings in Bread Financial by 4.5% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 29,589 shares of the company’s stock worth $1,482,000 after purchasing an additional 1,286 shares during the period. Millennium Management LLC lifted its holdings in shares of Bread Financial by 46.5% during the first quarter. Millennium Management LLC now owns 345,902 shares of the company’s stock valued at $17,323,000 after purchasing an additional 109,864 shares during the last quarter. Goldman Sachs Group Inc. boosted its position in shares of Bread Financial by 104.8% in the 1st quarter. Goldman Sachs Group Inc. now owns 736,604 shares of the company’s stock worth $36,889,000 after purchasing an additional 376,920 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Bread Financial by 3.0% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 157,833 shares of the company’s stock worth $7,904,000 after buying an additional 4,624 shares during the last quarter. Finally, Strs Ohio bought a new position in Bread Financial during the 1st quarter valued at approximately $65,000. Institutional investors own 99.52% of the company’s stock.

Key Headlines Impacting Bread Financial

Here are the key news stories impacting Bread Financial this week:

• Positive Sentiment: Q4 results materially beat expectations — strong EPS and revenue, with management highlighting improved credit metrics and solid margins, which supports near-term profitability. MarketBeat Earnings Summary
• Positive Sentiment: BTIG reaffirmed a “buy” rating and maintained a $98 price target (significant upside vs. the current share level), offering a bullish analyst counterpoint that may support the stock. TickerReport: BTIG Coverage
• Positive Sentiment: Company commentary and investor materials indicate low single-digit loan growth guidance for 2026 and improving credit metrics (delinquencies down year-over-year), which reduces downside risk from credit cycles. Seeking Alpha: Credit Metrics Update
• Neutral Sentiment: Bread declared a quarterly common dividend of $0.23 per share (payable March 16, ex-dividend Feb 27), providing modest income but not a large yield. GlobeNewswire: Dividend Notice
• Neutral Sentiment: Company performance update published December metrics (net loss rate 7.4%, delinquency ~5.8%) — shows improvement vs. prior year but still-elevated loss levels that investors will monitor. GlobeNewswire: Performance Update
• Neutral Sentiment: Earnings call materials and transcript are available for deeper read — useful for investors assessing forward commentary on losses, loan growth and buyback/dividend plans. Seeking Alpha: Earnings Call Transcript
• Negative Sentiment: Morgan Stanley raised its price target to $68 but kept an “underweight” stance — the PT implies downside from current levels and signals caution from a major institutional shop, which can weigh on sentiment. Benzinga: Analyst Note

Analyst Upgrades and Downgrades

Several equities analysts recently issued reports on BFH shares. TD Cowen boosted their target price on shares of Bread Financial from $85.00 to $88.00 and gave the company a “hold” rating in a report on Friday. Keefe, Bruyette & Woods lifted their price objective on Bread Financial from $82.00 to $92.00 and gave the stock an “outperform” rating in a research report on Friday, January 2nd. The Goldman Sachs Group raised Bread Financial from a “sell” rating to a “hold” rating and set a $84.00 price objective on the stock in a research note on Tuesday, January 6th. Morgan Stanley raised their target price on Bread Financial from $62.00 to $68.00 and gave the stock an “underweight” rating in a research note on Friday. Finally, Barclays lifted their target price on Bread Financial from $61.00 to $64.00 and gave the stock an “underweight” rating in a report on Friday. Four equities research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and three have given a Sell rating to the stock. According to MarketBeat, Bread Financial currently has an average rating of “Hold” and an average price target of $79.27.

Bread Financial announced that its Board of Directors has approved a share buyback plan on Thursday, October 23rd that permits the company to repurchase $200.00 million in shares. This repurchase authorization permits the company to buy up to 7.1% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company’s board believes its stock is undervalued.

About Bread Financial

Bread Financial, formerly known as Alliance Data Systems, is a Columbus, Ohio–based financial services company that specializes in providing private label credit programs, co-brand credit cards and digital payment solutions for retail partners. The company designs, issues and services proprietary credit products, enabling merchants to offer branded financing options that drive customer loyalty and increase basket sizes at the point of sale. Through its Bread technology platform, Bread Financial delivers installment-based payment options that integrate directly into e-commerce and in-store checkout experiences.

In addition to its core credit offerings, Bread Financial provides analytics, marketing and loyalty services to help merchants better understand consumer behavior and optimize promotional strategies.