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Bread Financial Holdings Inc BFH Stock Quote

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Morningstar‘s Stock Analysis BFH

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Bread Financial Faces Challenges as It Looks to Resume Growth After Spinning Off Assets

Michael Miller Equity Analyst

Business Strategy and Outlook

| Michael Miller |

After the sale of Epsilon in 2019 and spinoff of LoyaltyOne in 2021, Bread Financial is now solely a consumer credit company, with its private label credit cards and buy now-pay later businesses being its only two product lines. However, Bread’s retail credit card business is under pressure. The company has historically targeted midsize retailers for its partnerships. This strategy has led to a partnership base that is weighted toward mall-based retailers, which are in decline due to increased online shopping. Many of Bread’s retail partners have already filed for bankruptcy, including the Ascena Retail Group in July 2020 and Forever 21 in 2019. Bread has also suffered defections, losing Wayfair and Meijer to Citi in 2020 and BJ's Wholesale Club to Capital One at the start of 2022. We see retail partner loss as an ongoing threat to Bread as the firm does not have a competitive advantage that would give it an edge in retaining partnerships during contract renewal negotiations.

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Key Statistics BFH

Company Profile BFH

Business Description

Formed by a combination of J.C. Penney’s credit card processing unit and The Limited’s credit card bank business, Bread Financial is a provider of private label and co-branded credit cards, loyalty programs, and marketing services. The company’s most financially significant unit is its credit card business that partners with retailers to jointly market Bread’s credit cards to their customers. The company also retains minority interest in its recently spunoff LoyaltyOne division, which operates the largest airline miles loyalty program in Canada and offers marketing services to grocery chains in Europe and Asia.

3075 Loyalty Circle
Columbus, OH, 43219
T +1 614 729-4000
Industry Credit Services
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 6,000