Bread Financial Holdings, Inc.

Bread Financial reported second-quarter net income of $146 million and diluted EPS of $3.55. Revenue increased $64 million, or 7% year over year; average loans increased 3% to $18.2 billion and end-of-period loans increased 5% to $18.5 billion. Tangible book value per common share increased 22% year over year to $63.66, adjusted PPNR grew 11%, net interest margin was 18.5%, delinquency rate was 5.25%, net loss rate was 6.98%, and the reserve rate was 11.23%. For 2026, management now expects average credit card and other loan growth to be up low to mid-single digits versus 2025, total revenue growth to be up low to mid-single digits, net interest margin to be flat to slightly higher than 2025, and full-year net loss rate to be 7.0% to 7.1%; normalized effective tax rate is expected at 25% to 27%.

Ralph Andretta said the quarter reflected accelerating credit sales, continued loan and deposit growth, higher revenue and PPNR, and improving credit performance. He framed the results as evidence that the company’s focus on responsible growth, operational excellence, and balance sheet transformation is working, and pointed to AI, digital investments, and partner innovation as ongoing priorities. His tone was upbeat but still cautious on the macro backdrop, repeatedly noting inflation pressure and uncertainty.

Perry Beberman said revenue grew 7% year over year, net income rose 5% to $146 million, and diluted EPS was $3.55. He highlighted a strong capital position, including a CET1 ratio of 12.9%, $6.7 billion of liquid assets and undrawn credit facilities, and total loss absorption capacity of 24.6% of total loans; he also noted $135 million of preferred stock issuance and $241 million of common share repurchases. On credit, he said the 3Q net loss rate should be approximately 30 basis points better than 2Q, and that the full-year net loss rate guide improved to 7.0% to 7.1%. He also said expenses should rise sequentially in 3Q and 4Q due to growth-related variable costs and continued investment, while still expecting positive operating leverage for 2026 excluding debt repurchase impacts.

Analysts focused on whether credit sales growth could accelerate further, how to model rising retailer share arrangements (RSAs), and whether improving credit metrics could keep drifting lower or eventually normalize. Management said June was unusually strong industry-wide, July had already shown some pullback, and full-year sales growth should still be solid but likely not as strong as the 11% pace seen in 2Q; they also said RSA payments should increase over time as partner programs scale, credit performance improves, and pricing changes flow through. On credit, management said newer vintages are performing well, they are not forcing losses lower through overly tight underwriting, and the path toward the 6% loss-rate target is visible but remains macro-dependent.