Transcript: Bread Finl Hldgs Q2 2026 Earnings Conference Call

Bread Finl Hldgs (NYSE: BFH ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. 66.

The company achieved 11% growth in adjusted PPNR and 7% revenue growth, driven by a combination of accelerating credit sales, loan growth, and disciplined expense management. Strategic expansions included partnerships with Ford, Raymour & Flanigan, and Ethan Allen, along with a significant rise in Bread Pay transactions, emphasizing flexible payment solutions. Direct-to-consumer deposits grew 16% year over year, now comprising 50% of the company's funding mix, marking a significant milestone. Management highlighted improving credit performance, a lower net loss rate, and a decrease in the delinquency rate, reflecting effective credit risk management.

The company issued $135 million in preferred stock and repurchased 7% of its common shares, demonstrating disciplined capital allocation and optimization of its capital stack. Future guidance indicates low to mid-single-digit loan growth for 2026 and expectations of a continued stable macroeconomic environment. The company continues to invest in digital and technology enhancements, including AI integration, to drive operational excellence and innovation. Management expressed confidence in achieving long-term targets, including mid-20s% ROTC, driven by responsible loan growth and operating efficiency improvements.

Full Transcript OPERATOR Good morning, and welcome to Bread Financial Holdings Inc's second-quarter 2026 earnings conference call. My name is Shannon, and I will be coordinating your call today. At this time, all participants are in a listen-only mode. Following today's presentation, the floor will be open for your questions.

To register a question, please press star followed by 1-1. It is now my pleasure to introduce Mr. Brian Verub, Head of Investor Relations at Bread Financial Holdings Inc. The floor is yours.

Brian Verub, Head of Investor Relations Thank you. com. On the call today we have Ralph Andretta, President and Chief Executive Officer, and Perry Beberman, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call, and some of the responses to your questions, may contain forward-looking statements.

These statements are based on management's current expectations and assumptions and are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Also on today's call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. Reconciliations of those measures to GAAP are included in our quarterly earnings materials posted on our Investor Relations website. With that, I would like to turn the call over to Ralph Andretta.

Ralph Andretta, President and CEO Thank you, Brian, and good morning to everyone joining us today. We are pleased with the strong financial results Bread Financial delivered in the second quarter. We saw accelerating credit sales, continued loan and deposit growth, increased revenue and PPNR, and improving credit performance. These results demonstrate the strength of our business model and the benefits of our continued emphasis on responsible growth and operational excellence, positioning Bread Financial for sustained, positive long-term performance.

66. Adjusted PPNR grew 11% year over year, supported by 7% revenue growth and ongoing disciplined expense management. Our strong execution across product mix and industry verticals is reflected in our second-quarter credit sales growth of 11% year over year and 5% end-of-period loan growth. Our growth in the quarter was broad.

Our existing co-brand partnerships, especially in travel and sporting goods, continue to see healthy growth. In addition, we continue to expand our reach through a full-year Ford program launch, new home partnerships with Raymour & Flanigan, Furniture First, and Ethan Allen, and our Bread Pay partnership with Vivint. These relationships reinforce the value we deliver through flexible payment solutions, disciplined underwriting, and a strong partner focus. 4 billion.

This marks our second strongest quarter of growth since the program began in 2019. Our direct-to-consumer deposits now comprise 50% of our funding mix, achieving an important milestone for the company and a target we set during our initial investor day. I am pleased with the growth and see further opportunity to build on this success. Also during the second quarter, we continue to optimize our capital stack, issuing a second round of preferred stock and repurchasing 7% of our outstanding common shares.

We will remain disciplined in our capital allocation strategy, prioritizing responsible, profitable loan growth and strategic investments in our business. Our results underscore our success in executing our priorities. Despite ongoing macroeconomic uncertainty, persistent inflation continues to influence household decision-making. Even so, our consumers' financial health remains resilient, as evidenced by continued sales growth, a stable payment rate, and improving credit performance.

We saw improvement in both our net loss rate and delin