Bread Financial (BFH) Q3 2026 earnings summary

Executive summary

• Q3 credit sales rose 9% to $7.424B, period-end loans grew 7% to $18.9B, and consumer deposits increased 21% to $9.9B.

• Revenue rose 5% to $1,017M; net income was $156M, down 17% YoY as prior-year results included a $38M favorable discrete tax item.

• Pretax income increased 6% to $209M and PPNR rose 7% to $530M; delinquency and net loss rates improved YoY.

• FY2026 guidance calls for ~4% average loan growth, ~5% revenue growth, positive operating leverage and a 6.9%-7.0% net loss rate.

Financial highlights

• Revenue growth reflected loan growth, lower interest expense and higher merchant and interchange fees; higher retailer share arrangements and lower billed late fees partly offset gains.

• Net interest income rose 6% YoY to $1,095M; provision for credit losses was $321M versus $299M a year earlier.

• Non-interest expenses increased 2% to $487M; adjusted expenses excluding debt-repurchase impacts were $486M versus $473M.

• Reported diluted EPS was $3.82 versus $3.96; adjusted diluted EPS excluding debt-repurchase impacts was $3.84 versus $4.02.

Outlook and guidance

• FY2026 average loan growth is expected at ~4% and revenue growth at ~5%; full-year NIM is expected slightly above 2025.

• FY2026 net loss-rate guidance improved to 6.9%-7.0%, versus 7.7% in 2025; normalized effective tax rate guidance is 25%-27%.

• Positive FY2026 operating leverage is expected, excluding pretax debt-repurchase impacts; investments include AI, technology modernization, marketing and product innovation.

• Q4 NIM is expected to compress modestly sequentially; expenses are expected to rise sequentially, and net interchange revenue as a share of credit sales should be similar to Q3.

• For 2027, NIM is expected flat to slightly down and credit losses are expected to decline, potentially less than in 2026; positive operating leverage remains a commitment.