Q4 2024 Bread Financial Holdings Inc Earnings Call Transcript
Key Points
- Bread Financial Holdings Inc (BFH) added iconic brand partners such as Hard Rock International, HP, and Saks Fifth Avenue, enhancing its portfolio and securing over 85% of its loans through 2026.
- The company successfully reduced its parent level debt by 50% since 2021, achieving a double leverage ratio target of below 115%.
- BFH's balance sheet improvements led to Moody's and Fitch upgrading their rating outlooks from stable to positive.
- The company achieved all its 2024 full-year targets despite a challenging macroeconomic environment, demonstrating operational resilience.
- BFH's direct-to-consumer deposits grew to $7.7 billion, improving its overall funding mix and providing a strong foundation for future growth.
- Credit sales decreased by 7% year-over-year, reflecting moderated consumer spending and proactive credit tightening actions.
- Revenue declined by 11% due to lower finance charges and late fees, as well as reduced merchant discount fees from lower big-ticket sales.
- The net loss rate remained elevated at 8.0%, with expectations of continued high loss rates in the first half of 2025.
- Loan yield decreased by 200 basis points year-over-year, impacted by lower finance charges and a shift in product and risk mix.
- The company faces ongoing economic and political uncertainties, including potential impacts from key legislative and monetary policies.
Thank you for standing by, and welcome to the Bread Financial fourth-quarter and full year 2024 earnings conference call. (Operator Instructions) As a reminder, today's program is being recorded.
And now I'd like to introduce your host for today's program, Brian Vereb, Head of Investor Relations at Bread Financial. Please go ahead, sir.
Thank you. Copies of the slides we will be reviewing and the earnings release can be found on the Investor Relations section of our website at breadfinancial.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
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