Bread Financial's November 2024 Performance Update: A Mixed Bag

Bread Financial Holdings, Inc. (NYSE: BFH) recently provided a performance update for November 2024, showcasing a mix of positive and negative trends in key metrics. The company, a tech-forward financial services provider, reported a slight increase in its net loss rate and a decrease in average credit card and other loans. However, it also saw an improvement in its delinquency rate and a decline in net principal losses.

The end-of-period credit card and other loans for November 2024 stood at $18.143 billion, down from $18.780 billion in November 2023. The average credit card and other loans decreased by 1% year-over-year, from $18.200 million to $17.947 million. This trend can be attributed to a combination of factors, including the revision in the calculation of average credit card and other loans to align with industry practice, as well as the impact of hurricanes Helene and Milton, which froze delinquency progression for cardholders in FEMA-identified impact zones.

Bread Financial's net loss rate increased slightly to 8.0% in November 2024, up from 7.9% in the same period last year. While this may seem concerning, it's essential to consider the industry average and the company's overall performance. According to the Federal Reserve, the average net charge-off rate for credit card loans in the U.S. was 3.2% in Q3 2024. Bread Financial's net loss rate, though higher than the industry average, has been relatively stable and is within the range of its historical performance. Moreover, the company's delinquency rate improved to 6.2% from 6.5% year-over-year, indicating a positive trend in customer payment behavior.

The hurricanes Helene and Milton have had a significant impact on Bread Financial's delinquent accounts, with a freeze on delinquency progression for cardholders in FEMA-identified impact zones. This has resulted in slightly lower net principal losses and net loss rate in the fourth quarter of 2024, offsetting higher net principal losses and net loss rate in the second quarter of 2025. This geographical impact highlights the importance of considering external factors when analyzing financial performance.

In conclusion, Bread Financial's November 2024 performance update reveals a mix of positive and negative trends. While the company has seen a slight increase in its net loss rate and a decrease in average credit card and other loans, it has also experienced an improvement in its delinquency rate and a decline in net principal losses. The impact of natural disasters on the company's financial performance serves as a reminder of the importance of risk management and adaptability in the face of external challenges. Investors should monitor these trends closely and consider the broader industry performance when evaluating Bread Financial's financial health.