COLUMBUS, Ohio - Bread Financial Holdings, Inc. (NYSE: BFH), a company specializing in personalized financial solutions, has released its latest performance figures, showing an uptick in its net loss rate for May 2024 compared to the same month last year. The data indicates a net loss rate of 8.8% for the month ended May 31, 2024, up from 8.4% in May 2023.
The company, which offers a range of payment, lending, and saving products, also reported a slight increase in its delinquency rate, which measures the percentage of loans where payments are overdue by 30 days or more. As of May 31, 2024, the delinquency rate stood at 5.9%, compared to 5.5% at the same point in the previous year.
In terms of loan volume, Bread Financial's end-of-period credit card and other loans amounted to $17,847 million at the end of May 2024, a slight decrease from $18,078 million a year earlier. The average credit card and other loans for May 2024 were $17,846 million, representing a 1% year-over-year change, compared to a 4% increase in May 2023.
The company attributes the changes in net loss and delinquency rates to the transition of credit card processing services completed in June 2022, which had a temporary impact on these metrics. Additionally, Bread Financial has revised its calculation methodology for average credit cards and other loans to align more closely with industry practices by incorporating an average daily balance starting January 2024.
Bread Financial, headquartered in Columbus, Ohio, emphasizes its tech-forward, digital-first approach in providing solutions that include private label and co-brand credit cards, as well as buy now, pay later products under its Bread Pay brand. The company also offers direct-to-consumer products such as the Bread Cashback American Express (NYSE:AXP) Credit Card and Bread Savings products.
This financial update is based on a press release statement from Bread Financial Holdings, Inc.
In other recent news, Bread Financial has been making significant strides in the financial sector. The company recently secured a multi-year agreement with luxury retailer Saks Fifth Avenue to offer co-branded and private-label credit cards. This deal, expected to be completed in the third quarter of 2024, includes the transition of Saks Fifth Avenue's existing credit card portfolio to Bread Financial.
Furthermore, Bread Financial has expanded its board with the appointment of two new independent directors, Praniti Lakhwara and John J. Fawcett. Lakhwara, currently the CIO at Zscaler (NASDAQ:ZS), brings over two decades of experience in scaling global IT operations. Fawcett, a veteran in the financial services sector, brings extensive experience in accounting, international operations, and business operations.
On the analyst front, the company has received mixed ratings. Barclays (LON:BARC) Capital Inc. issued an "Underweight" rating, while Wolfe Research and Keefe, Bruyette & Woods upgraded Bread Financial to "Outperform". Argus, however, downgraded the company's shares from Buy to Hold due to a challenging revenue environment.
These are the recent developments in Bread Financial.
InvestingPro Insights
Bread Financial Holdings, Inc. (NYSE: BFH) has been navigating a challenging financial landscape, as evidenced by the recent uptick in net loss and delinquency rates. In light of these developments, key metrics and InvestingPro Tips can offer investors a deeper understanding of the company's current market position and future prospects.
Despite the concerns raised by the recent financial figures, InvestingPro Tips highlight a silver lining with Bread Financial's high shareholder yield, indicating a return of value to its investors. Additionally, the company has demonstrated resilience by maintaining dividend payments for 9 consecutive years, reassuring investors of its commitment to shareholder returns. On the flip side, analysts have tempered their expectations, with 6 analysts revising their earnings downwards for the upcoming period, which may suggest caution in the short term.
From a valuation standpoint, Bread Financial's P/E Ratio stands at an attractive 4.89, with an adjusted P/E Ratio for the last twelve months as of Q1 2024 at 4.58, suggesting the stock is trading at a low earnings multiple. This could imply that the stock is undervalued relative to its earnings, a point of interest for value investors. Furthermore, with a market capitalization of $1,910 million USD, the company holds a significant place in its sector.
Investors looking to delve deeper into Bread Financial's performance and potential can access additional InvestingPro Tips on https://www.investing.com/pro/BFH. With the use of coupon code PRONEWS24, new subscribers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a treasure trove of insights with many more tips available on the platform.
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