BFH Q4 Deep Dive: Product Diversification and Operational Discipline Drive Outperformance

Stock Story

Financial services company Bread Financial missed Wall Street’s revenue expectations in Q4 CY2025, with sales falling 35% year on year to $602 million. Its non-GAAP profit of $2.07 per share was significantly above analysts’ consensus estimates.

Bread Financial (BFH) Q4 CY2025 Highlights:

Revenue: $602 million vs analyst estimates of $954.4 million (35% year-on-year decline, 36.9% miss)
Adjusted EPS: $2.07 vs analyst estimates of $0.48 (significant beat)
Operating Margin: 4.7%, up from -2.9% in the same quarter last year
Market Capitalization: $3.33 billion

StockStory’s Take

Bread Financial’s fourth quarter was marked by continued execution on its strategy of product diversification and operational discipline, leading to results that exceeded Wall Street’s expectations. Management credited growth to new brand signings, including notable partnerships in retail and installment lending, as well as renewals with existing partners like Caesars Entertainment. CEO Ralph Andretta highlighted the positive impact of an expanded product suite, particularly co-brand credit card programs, and the company’s digital-first approach in driving increased sales and customer engagement. The quarter also benefited from disciplined credit management and a resilient consumer environment, with Andretta noting, “The positive trajectory of our credit sales and credit metrics, along with our new business additions and stable partner base, give us confidence that we are nearing an inflection point of loan growth as we enter 2026.”

Looking ahead, management’s outlook is shaped by expectations of continued consumer resilience, a stable labor market, and gradual improvement in credit metrics. CFO Perry Beberman emphasized ongoing investments in technology modernization and AI to drive operational efficiencies and support growth. While the company anticipates modest loan and revenue growth in 2026, Beberman cautioned that the pace of improvement will depend on macroeconomic factors, including Federal Reserve interest rate decisions and consumer response to changing conditions. The company remains focused on responsible growth, with Andretta stating, “Our commitment to prudently managing capital and risk positions us well to deliver sustainable, long-term value for shareholders.”

Key Insights from Management’s Remarks

Management attributed the quarter’s solid performance to product and partner expansion, prudent risk management, and efficiency gains, while also highlighting the company’s ability to adapt to evolving consumer spending patterns and funding strategies.

New partnerships and renewals: The company secured seven major new brand signings and renewed multiple key partners, including high-profile additions such as Bed Bath & Beyond and Raymour & Flanigan, broadening its reach in both retail and travel & entertainment sectors.
Product suite expansion: Bread Financial advanced its flexible payment solutions, launching new installment lending relationships (BreadPay) with partners like Cricket Wireless and Vivint, and introduced an enhanced Caesars Rewards credit card, reinforcing its focus on omnichannel delivery and customer loyalty.
Shift towards co-brand cards: The mix of co-branded credit sales rose to 52% in the quarter (up from 48% in 2024), reflecting management’s partner-first strategy and successful execution in aligning product offerings with evolving consumer preferences.
Operational excellence and technology: Ongoing investment in technology transformation, including cloud migration and increased automation with AI, delivered positive operating leverage and reduced expenses, while also supporting customer experience improvements and risk management.
Direct-to-consumer deposits growth: Direct-to-consumer deposit balances grew for the 20th consecutive quarter, now constituting 48% of average funding and providing a stable, lower-cost source of capital that supports both growth and balance sheet optimization.

Drivers of Future Performance

Bread Financial’s outlook for 2026 centers on cautious loan and revenue growth, with a focus on credit quality improvement, technology investments, and maintaining a resilient funding base amid macroeconomic uncertainty.

Credit quality improvement: Management expects gradual enhancements in credit metrics, driven by disciplined underwriting, product mix shifts toward lower-risk offerings, and a resilient consumer base. Beberman noted that while net loss rates are forecast to decline modestly, the company will not force a return to pre-pandemic levels, instead allowing metrics to improve organically as newer vintages season and the legacy portfolio heals.
Technology and AI investments: The company is accelerating its technology transformation, particularly through AI deployment and cloud migration, to improve operational efficiencies, automate workflows, and enhance risk controls. Management believes these efforts will deliver further operating leverage and unlock long-term productivity gains.
Funding and capital optimization: Bread Financial aims to continue growing direct-to-consumer deposits toward peer levels (targeting over 50% of funding), while optimizing its capital structure through preferred equity issuance and prudent share repurchases. Management sees this as essential for supporting growth and maintaining flexibility in a dynamic rate environment.

Catalysts in Upcoming Quarters

In the quarters ahead, our analyst team will be watching (1) the pace of new partner signings and the expansion of BreadPay and other flexible payment solutions, (2) progress on technology modernization and AI initiatives that could drive further efficiency gains, and (3) sustained growth in direct-to-consumer deposits as a key funding source. The trajectory of credit quality improvements and consumer spending patterns will also serve as important barometers for future performance.

Bread Financial currently trades at $72.95, up from $68.20 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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Why Are Bread Financial (BFH) Shares Soaring Today

Stock Story

Bread Financial

+1.46%

What Happened?

Shares of financial services company Bread Financial jumped 5.1% in the afternoon session after the company reported fourth-quarter 2025 financial results that significantly surpassed Wall Street's expectations.

Bread Financial announced adjusted earnings of $2.07 per share, significantly higher than Wall Street's consensus estimate of $0.48. The company's revenue also came in strong at $975 million for the quarter, topping forecasts and marking a 5.3% increase from the same period in the previous year. These positive results on both the top and bottom lines drove investor optimism.

What Is The Market Telling Us

Bread Financial’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 23 days ago when the stock gained 4.9% on the news that investors shrugged off geopolitical tensions in Venezuela to push the S&P 500 and Dow Jones Industrial Average to new all-time highs.

The rally was spearheaded by a resurgence in the "Magnificent Seven" and artificial intelligence sectors, with Amazon and Micron Technology posting significant gains. Market sentiment was fueled by a dual engine: "AI enthusiasm" approaching a fever pitch and expectations for a "hot" economy in 2026, supported by anticipated rate cuts and fiscal stimulus. This robust environment allowed both high-growth tech stocks and cyclical sectors to advance simultaneously.

Bread Financial is down 4.2% since the beginning of the year, and at $72.15 per share, it is trading 11.2% below its 52-week high of $81.25 from January 2026. Investors who bought $1,000 worth of Bread Financial’s shares 5 years ago would now be looking at an investment worth $1,066.

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Bread Financial (NYSE:BFH) Surprises With Q4 CY2025 Sales

Stock Story

Bread Financial

+1.46%

Financial services company Bread Financial reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 5.3% year on year to $975 million. Its non-GAAP profit of $2.07 per share was significantly above analysts’ consensus estimates.

Bread Financial (BFH) Q4 CY2025 Highlights:

Net Interest Income: $1.05 billion vs analyst estimates of $1.02 billion
Net Interest Margin: 18.9% vs analyst estimates of 18.4% (46.7 basis point beat)
Revenue: $975 million vs analyst estimates of $954.4 million (5.3% year-on-year growth, 2.2% beat)
Efficiency Ratio: 57% vs analyst estimates of 53.5% (355 basis point miss)
Adjusted EPS: $2.07 vs analyst estimates of $0.48 (significant beat)
Market Capitalization: $3.11 billion

Company Overview

Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Bread Financial’s 3.1% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the financials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Bread Financial’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.3% annually.

Bread Financial Year-On-Year Revenue Growth

Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Bread Financial reported year-on-year revenue growth of 5.3%, and its $975 million of revenue exceeded Wall Street’s estimates by 2.2%.

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Net Interest Margin

Net interest margin (NIM) serves as a critical gauge of a financial institution's fundamental profitability by showing the spread between interest income and interest expenses. It's essential for understanding whether a firm can sustainably generate returns from its lending operations.

Bread Financial’s net interest margin has increased by 40.8 basis points (100 basis points = 1 percentage point) over the last four years but decreased by 105.8 basis points on a two-year basis. Although the longer-term change is reassuring, the two-year result was worse than the financials industry. The firm’s NIM for the trailing 12 months was 18.4%.

Bread Financial Trailing 12-Month Net Interest Margin

Key Takeaways from Bread Financial’s Q4 Results

It was good to see Bread Financial beat analysts’ EPS expectations this quarter. We were also excited its net interest margin outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 3.4% to $70.49 immediately after reporting.

Bread Financial may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).

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Bread Financial Provides Performance Update for December 2025

GlobeNewswire

Bread Financial

+1.46%

COLUMBUS, Ohio, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Bread Financial ® Holdings, Inc. , a tech-forward financial services company that provides simple, personalized payment, lending, and saving solutions to millions of U.S. consumers, provided a performance update. The following tables present the Company’s net loss rate and delinquency rate for the periods indicated:

	For themonth endedDecember 31, 2025			For thethree months endedDecember 31, 2025
	(dollars in millions)
End-of-period credit card and other loans	$	18,805		$	18,805
Average credit card and other loans	$	18,474		$	17,961
Year-over-year change in average credit card and other loans		(1	%)		(1	%)
Net principal losses	$	116		$	336
Net loss rate		7.4	%		7.4	%

	As ofDecember 31, 2025			As ofDecember 31, 2024
	(dollars in millions)
30 days + delinquencies – principal	$	971		$	1,034
Period ended credit card and other loans – principal	$	16,886		$	17,418
Delinquency rate		5.8	%		5.9	%

About Bread Financial®

Bread Financial®  is a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions to millions of U.S. consumers. Our payment solutions, including Bread Financial general purpose credit cards and savings products, empower our customers and their passions for a better life. Additionally, we deliver growth for some of the most recognized brands in travel & entertainment, health & beauty, jewelry and specialty apparel through our private label and co-brand credit cards and pay-over-time products providing choice and value to our shared customers.

Bread Financial proudly marks 30 years of success in 2026. To learn more about our global associates, our performance and our sustainability progress, visit breadfinancial.com or follow us on Instagram and LinkedIn.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan,” “likely,” “may,” “should” or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, future dividend declarations, and future economic conditions.

We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that are difficult to predict and, in many cases, beyond our control. Accordingly, our actual results could differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurances can be given that our expectations will prove to have been correct. Factors that could cause the outcomes to differ materially include, but are not limited to, the following: macroeconomic conditions, including market conditions, inflation, interest rates, labor market conditions, recessionary pressures or concerns over a prolonged economic slowdown, and the related impact on consumer spending behavior, payments, debt levels, savings rates and other behaviors; global political and public health events and conditions, including significant shifts in trade policy, such as changes to, or the imposition of, tariffs and/or trade barriers and consequently any economic impacts, volatility, uncertainty and geopolitical instability resulting therefrom, as well as ongoing wars and military conflicts and natural disasters; future credit performance, including the level of future delinquency and charge-off rates; loss of, or reduction in demand for services and/or products from, significant brand partners or customers in the highly competitive markets in which we operate, including competition from new and non-traditional competitors, such as financial technology companies, and with respect to new products, services and technologies, such as the emergence or increase in popularity of agentic commerce, digital payment platforms and currencies and other alternative payment and deposit solutions; the concentration of our business in U.S. consumer credit; inaccuracies in the models and estimates on which we rely, including our credit risk management models and the amount of our Allowance for credit losses; the inability to realize the intended benefits of acquisitions, dispositions and other strategic initiatives; our level of indebtedness and ability to access financial or capital markets; pending and future federal and state legislation, executive action, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to financial regulatory reform and consumer financial services practices, as well as any such actions that would place limits on credit card interest rates or late fees, interchange fees or other charges; failures or breaches in our operational or security systems, including as a result of cyberattacks, unanticipated impacts from technology modernization projects or otherwise; and any liability or other adverse impacts arising out of or related to the spinoff of our former LoyaltyOne segment or the bankruptcy filings of Loyalty Ventures Inc. (LVI) and certain of its subsidiaries, including the pending litigation against us in connection with the spinoff. The foregoing factors, along with other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements, are described in greater detail under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in Item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

Contacts

Brian Vereb — Investor Relations

Brian.Vereb@breadfinancial.com

Susan Haugen — Investor Relations

Susan.Haugen@breadfinancial.com

Rachel Stultz — Media

Rachel.Stultz@breadfinancial.com

Risk Warnings and Disclaimers

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Bread Financial Reports Fourth Quarter and Full Year 2025 Results

GlobeNewswire

Bread Financial

+1.46%

COLUMBUS, Ohio, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Bread Financial ® Holdings, Inc. , a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, today announced its fourth quarter and full year 2025 financial results. All earnings-related materials are now available at the company’s investor relations website, here.

Bread Financial President and Chief Executive Officer Ralph Andretta and Chief Financial Officer Perry Beberman will host a conference call at 8:30 a.m. ET today to discuss results. A link to the conference call will be available at the company’s investor relations website, and a replay will also be available there following the call.

About Bread Financial®

Bread Financial® is a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions to millions of U.S. consumers. Our payment solutions, including Bread Financial general purpose credit cards and savings products, empower our customers and their passions for a better life. Additionally, we deliver growth for some of the most recognized brands in travel & entertainment, health & beauty, jewelry and specialty apparel through our private label and co-brand credit cards and pay-over-time products providing choice and value to our shared customers.

Bread Financial proudly marks 30 years of success in 2026. To learn more about our global associates, our performance and our sustainability progress, visit breadfinancial.com or follow us on Instagram and LinkedIn.

Contacts

Brian Vereb — Investor Relations

Brian.Vereb@breadfinancial.com

Susan Haugen — Investor Relations

Susan.Haugen@breadfinancial.com

Rachel Stultz — Media

Rachel.Stultz@breadfinancial.com

Risk Warnings and Disclaimers

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Bread Financial Declares Dividends on Preferred and Common Stock

GlobeNewswire

Bread Financial

+1.46%

COLUMBUS, Ohio, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Bread Financial® Holdings, Inc. , a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, today announced that its Board of Directors declared quarterly dividends on its preferred and common stock for the first quarter of 2026.

On the Company’s 8.625% Non-Cumulative Perpetual Preferred Stock, Series A -PrA), the Board of Directors declared a quarterly cash dividend of $26.35 per share (equivalent to $0.65875 per depositary share, each representing a 1/40th interest in a share of preferred stock). The dividend is payable on March 16, 2026 to preferred stockholders of record at the close of business on February 27, 2026.

On the Company’s common stock, its Board of Directors declared a quarterly cash dividend of $0.23 per share, payable on March 16, 2026 to common stockholders of record at the close of business on February 27, 2026.

About Bread Financial®

Contacts

Brian Vereb — Investor Relations

Brian.Vereb@breadfinancial.com

Susan Haugen — Investor Relations

Susan.Haugen@breadfinancial.com

Rachel Stultz — Media

Rachel.Stultz@breadfinancial.com

Risk Warnings and Disclaimers

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What To Expect From Bread Financial’s (BFH) Q4 Earnings

Stock Story

Bread Financial

+1.46%

Financial services company Bread Financial will be reporting earnings this Thursday morning. Here’s what to look for.

Bread Financial met analysts’ revenue expectations last quarter, reporting revenues of $971 million, down 1.2% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and .

Is Bread Financial a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Bread Financial’s revenue to grow 3.1% year on year to $954.4 million, a reversal from the 8.9% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.47 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Bread Financial has missed Wall Street’s revenue estimates four times over the last two years.

Looking at Bread Financial’s peers in the consumer finance segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Synchrony Financial posted flat year-on-year revenue, missing analysts’ expectations by 1.5%, and Capital One reported revenues up 53.3%, topping estimates by 0.9%. Capital One traded down 7.5% following the results.

Read our full analysis of Synchrony Financial’s results here and Capital One’s results here.

Investors in the consumer finance segment have had steady hands going into earnings, with share prices flat over the last month. Bread Financial is down 7.6% during the same time and is heading into earnings with an average analyst price target of $80.07 (compared to the current share price of $70.70).

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