PROG (PRG) Q3 Earnings call transcript Oct 23, 2024
1min read PROG Holdings, a leading provider of lease-purchase solutions, showcased a robust third quarter performance, surpassing expectations in GMV growth and maintaining a balanced share in the market. The company's strategic focus on enhancing customer and retailer experiences, coupled with external factors like tighter approval rates from lenders, contributed to the Q3 GMV growth of 11.6%.
The company's leadership team, led by President and CEO Steve Michaels and CFO Brian Garner, highlighted the importance of the company's grow, enhance, and expand strategy. This strategy, which emphasizes deepening partnerships, attracting new customers, and expanding market reach, has been instrumental in driving the company's growth and positioning it for future success.
Despite the challenges posed by market conditions, including the impact of Big Lots' bankruptcy and store closures, PROG Holdings remains optimistic about its outlook for the remainder of the year. The company is poised to carry its momentum into Q4, expecting GMV growth to be in the high single to low double digits.
The third quarter also saw notable achievements in the company's direct-to-consumer initiatives, particularly in the PROG Marketplace platform. The platform, which allows customers to shop anytime, anywhere through the mobile app, has seen significant traction, with over 300% growth year-to-date. This growth is expected to exceed the 2024 GMV target, positioning the company for a successful year-end and beyond.
Furthermore, PROG Holdings' focus on sustainability and cost control is evident in its financial performance. The company's adjusted EBITDA reached $63.5 million, representing a 10.5% margin, driven by GMV growth and supported by stable portfolio performance and disciplined spending. The company's ability to manage its lease portfolio and adjust to customer and portfolio health trends is a testament to its dynamic decision-making and financial management capabilities.
Looking ahead, PROG Holdings is focused on maintaining its 2024 write-offs within its targeted annual range of 6% to 8%, while continuing to execute on its strategic initiatives. The company's commitment to growth, innovation, and customer satisfaction, along with its ability to navigate market challenges, positions it well for continued success in the financial services sector.
In conclusion, PROG Holdings' third quarter results underscore its resilience and strategic prowess in a dynamic business environment. The company's focus on enhancing customer experiences, expanding market reach, and maintaining financial discipline is a testament to its commitment to sustainable and profitable growth. As PROG Holdings heads into the fourth quarter and beyond, it is well-positioned to capitalize on opportunities and navigate challenges, making it a compelling investment prospect for stakeholders.
