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Here are 1-3 brief analogies to describe Bread Financial (BFH):

• Like Capital One for store credit cards and retail financing.
• Like the credit card division of a major bank (e.g., Chase or Citi), but exclusively focused on creating branded payment solutions for retailers.

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• Private Label Credit Card Programs: Bread Financial partners with retailers to issue and manage credit cards branded exclusively for use at a specific retail brand.
• Co-brand Credit Card Programs: They provide credit cards bearing both a retailer's brand and a major network (e.g., Visa, Mastercard), which are usable anywhere the network is accepted.
• Installment Loan Products: Offering consumers point-of-sale financing options to pay for purchases in fixed installments over a set period.
• Bread Savings Accounts: Providing high-yield savings accounts directly to consumers to help them save and grow their money.

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Bread Financial (BFH) primarily sells its private-label and co-brand credit card programs and related payment and lending solutions to other companies, specifically major retailers. These retailers are Bread Financial's direct customers, as they partner with BFH to offer branded credit products to their own consumers.

Some of Bread Financial's major customer companies (retail partners) include:

• Gap Inc. (NYSE: GPS) – which includes brands like Gap, Old Navy, Banana Republic, and Athleta.
• Bath & Body Works, Inc. (NYSE: BBWI)
• American Eagle Outfitters, Inc. (NYSE: AEO) – which includes American Eagle and Aerie.
• Victoria's Secret & Co. (NYSE: VSCO) – which includes Victoria's Secret and PINK.
• Wayfair Inc. (NYSE: W)

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• Experian (EXPN)
• TransUnion (TRU)
• Equifax (EFX)
• Visa (V)
• Mastercard (MA)

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Ralph Andretta, President and Chief Executive Officer

Ralph Andretta joined Bread Financial in February 2020 and is responsible for the company's growth, development, and financial performance. He has over 30 years of experience in financial services. Previously, Mr. Andretta served as Managing Director and Head of U.S. Cards for Citigroup from 2011 to 2019, where he oversaw significant client partnerships and product launches. He also held positions as Global Affinity Products and International Card Executive with Bank of America from 2010 to 2011 and spent 18 years with American Express in various operational and financial roles, both domestically and internationally. He led Bread Financial through a multi-year business transformation, which included rebranding, modernizing its technology, acquiring a fintech, and expanding its product offerings.

Perry Beberman, Executive Vice President, Chief Financial Officer

Perry Beberman joined Bread Financial as Executive Vice President and Chief Financial Officer in July 2021, bringing more than 30 years of experience in financial services to the company. Prior to Bread Financial, he served as Senior Vice President and Finance Executive for Consumer and Wealth Management Lending Products at Bank of America. Mr. Beberman joined Bank of America following its acquisition of MBNA, where he had spent over 17 years in leadership roles, including Executive Vice President of Finance, Strategic Planning & Chief Financial Officer Administration. His prior company, MBNA, was acquired by Bank of America.

Valerie Greer, Executive Vice President, Chief Commercial Officer

Valerie Greer serves as the Executive Vice President and Chief Commercial Officer at Bread Financial.

Allegra Driscoll, Executive Vice President, Chief Technology Officer

Allegra Driscoll is the Executive Vice President and Chief Technology Officer at Bread Financial.

Tammy McConnaughey, Executive Vice President, Chief Credit Risk and Operations Officer

Tammy McConnaughey holds the position of Executive Vice President, Chief Credit Risk and Operations Officer at Bread Financial.

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The key risks to Bread Financial's business (BFH) include:

1. Credit Risk and Macroeconomic Conditions: Bread Financial's profitability is highly sensitive to the overall health of the economy, consumer spending behavior, and employment levels. The company faces significant macroeconomic risks, including inflation, interest rates, and recessionary pressures, which can adversely affect consumer loan performance. Elevated delinquency rates and net loss rates are a consistent concern, with a net principal loss rate of 8.2% in 2024, and anticipated to be in the 8.0% to 8.2% range for 2025. Managing credit risk is considered the single most important factor for Bread Financial's profitability moving into 2026.
2. Regulatory Risks and the CFPB Late Fee Rule: The Consumer Financial Protection Bureau's (CFPB) final rule on credit card late fees poses a significant risk to Bread Financial's business. This rule, if implemented, will place substantial limits on credit card late fees, which would have a significant impact on the company's revenue and results of operations, at least in the short term. The long-term impact will depend on the effectiveness of the company's mitigation strategies.
3. Interest Rate Risk: Changes in market interest rates can negatively affect Bread Financial's profitability. The company's finance charges and interest expense fluctuate with market rates, as its assets and liabilities carry both fixed and floating interest rates. Changes in monetary policy, including interest rate adjustments by the Federal Reserve, can influence the interest earned on loans and the interest paid on deposits and borrowings, potentially pressuring net interest income.

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• Proliferation and Adoption of Buy Now, Pay Later (BNPL) Services: BNPL offers alternative financing at the point of sale, directly competing with Bread Financial's core private label and co-brand credit card business. These services are increasingly integrated into merchant checkouts, diverting potential credit card spend.
• Increased Competition from Tech Giants and Fintechs in Embedded Finance: Large technology companies and well-funded fintechs are expanding their financial service offerings, including credit products and loyalty programs, often directly integrating them into commerce platforms. This trend of "embedded finance" can disintermediate traditional third-party credit card issuers like Bread Financial.
• Intensifying Regulatory Scrutiny on Credit Card Fees and Practices: Regulators are increasing their focus on credit card practices, including late fees and interest rates. Stricter regulations could limit Bread Financial's revenue generation from fees and interest, increase compliance costs, or necessitate significant changes to its business model.

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Addressable Markets for Bread Financial's Main Products and Services:

• Private Label and Co-brand Credit Cards: The purchase volume for private label credit cards in the U.S. was $201.20 billion in 2023. This market is projected to reach a purchase volume of $339.9 billion and card outstandings of $172.9 billion by 2025 in the United States.
• Loyalty Programs: The U.S. loyalty market is expected to grow to US$27.26 billion in 2025. This market is anticipated to increase from US$23.57 billion in 2024 to reach US$44.73 billion by 2029 in the United States.
• Bread Pay (Buy Now, Pay Later / Installment Loans): This service falls under the broader consumer finance market. The North America consumer finance market was valued at USD 426.81 billion in 2023. The global consumer finance market was estimated at $1408.92 billion in 2024 and is projected to grow to $2905.77 billion by 2035.
• Direct-to-consumer (DTC) Credit Cards (General Purpose Credit Cards): The purchase volume for American Express, Discover, Mastercard, and Visa general purpose credit cards in the U.S. was $5.821 trillion in 2023.
• Bread Savings Products: null

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Here are 3-5 expected drivers of future revenue growth for Bread Financial (BFH) over the next 2-3 years:

1. Growth in Credit Sales and Loan Balances: Bread Financial anticipates continued improvement in credit sales and loan growth. The company reported a 5% increase in credit sales in Q3 2025, with consumer financial health remaining resilient, driven by factors like strong back-to-school activity and increased purchase frequency. While average loans were expected to be flat to slightly down in 2025 compared to 2024, year-end 2025 loans are projected to be slightly higher due to new business growth and increased credit sales. Management is also targeting a mid-to-high single-digit loan growth rate over the long term.
2. Expansion of Partnerships and New Business Growth: The company is focused on expanding its partnerships, particularly in the home vertical sector, to drive new business. Deepening merchant partnerships is considered crucial to offsetting risks of flat to declining loan growth and supporting the short-term revenue outlook. Growth from both new and existing partners is expected to contribute to improved credit sales.
3. Product Innovation and Diversification: Bread Financial is actively enhancing its product offerings and demonstrating strategic flexibility, including buy now, pay later (BNPL) and installment loans. An example of this is the launch of a co-branded credit card with crypto.com in Q2 2025, which reflects efforts to diversify offerings and capture new market segments.
4. Lower Cost of Funds through Direct-to-Consumer (DTC) Deposits: The strategic focus on growing direct-to-consumer deposits aims to diversify and stabilize Bread Financial's funding base. DTC deposits increased by 9% year-over-year to $8.2 billion in Q3 2025, now representing 47% of average total funding. The goal is to have DTC deposits account for half of total funding in the future, which will reduce reliance on more expensive funding sources and ultimately lower the cost of capital, thereby enhancing profitability and supporting revenue generation from lending activities.

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Share Repurchases

• Bread Financial authorized a new share repurchase plan of up to $200 million in August 2025, followed by a $200 million increase in October 2025, raising the total available repurchase capacity to $340 million.
• In 2024, the company executed a stock repurchase program, acquiring 1.0 million shares for $55 million to offset dilution from employee stock issuances.
• Year-to-date in 2025, Bread Financial repurchased $150 million worth of shares by July 24, and $60 million through October.

Share Issuance

• Share repurchases made in 2024 were specifically aimed at offsetting dilution resulting from employee stock issuances.

Outbound Investments

• In the third quarter of 2024, Bread Financial completed the portfolio acquisition and launched the Saks Fifth Avenue credit card, and also launched the Hard Rock credit card program in October.
• Throughout 2023, the company launched and renewed several key brand partner relationships, including Dell Technologies and The New York Yankees.

Capital Expenditures

• Bread Financial has made significant investments to upgrade its core technology and digital capabilities, supporting its lending and payment products.
• The company continues to invest in technology modernization, digital product innovation, and AI-driven solutions to enhance operational efficiency and improve credit risk assessment.