PROG Holdings Cuts 2026 Revenue Outlook to $3.015–$3.050 Billion, Announces Buyback
Key Facts
PROG Holdings lowered its revenue outlook for the fiscal year ending December 31, 2026, to a range of $3.015 billion to $3.050 billion, from $3.025 billion to $3.100 billion in its previous forecast issued in June. Alongside the lower outlook, the company said it intends to enter into an accelerated share repurchase agreement for $100 million of common stock during the fourth quarter of 2026. The company said transactions related to the agreement are expected to be completed during the first quarter of 2027. The lower outlook reflects greater caution about customer conditions, after management said persistent macroeconomic pressures on some customers prompted it to narrow its revenue and earnings forecasts. In its results statement, Chief Executive Steve Michaels said, "We are taking a more cautious view of the consumer as we approach year-end."
PROG also lowered its 2026 non-GAAP diluted earnings-per-share outlook to $4.70–$4.85, from a previous forecast of $4.75 to $5.00. It also cut its adjusted EBITDA range to $345–$355 million, from $355–$375 million in its June forecast. The revisions put both revenue and earnings on a lower expected track for the current fiscal year, rather than adjusting only one of the measures. In the third quarter, revenue from continuing operations was $725.8 million, up 25.6% year over year. Net earnings from continuing operations were $37.5 million, compared with $32.3 million in the same period of 2025.
Adjusted EBITDA was $80.0 million in the third quarter, up from $65.7 million a year earlier, but its margin fell to 11.0% from 11.4%. Diluted earnings per share from continuing operations were $0.92, compared with $0.80 in the third quarter of 2025. On a non-GAAP basis, diluted earnings per share rose to $1.06 from $0.87, an increase of 21.8% year over year. Consolidated gross merchandise volume rose 58.9% to $912.0 million. Results by business unit show differing sources of that performance, with Progressive Leasing revenue declining while Four revenue more than doubled.
Progressive Leasing revenue fell 0.7% to $552.7 million, despite a 2.3% increase in its gross merchandise volume to $420.4 million. Its adjusted EBITDA declined 12.3% to $56.5 million. By contrast, Four revenue rose 113.8% to $37.2 million, while its gross merchandise volume increased 102.6% to $330.4 million. Four's pretax earnings also surged 683.6% to $10.0 million in the third quarter. The mixed performance is consistent with management's decision to lower its outlook despite growth in consolidated quarterly revenue and earnings, as it attributed the forecast revision to economic pressure on consumers.
The proposed buyback would expand the company's return to this option after Michaels said in the second quarter that a decline in net leverage to about 1.7 times, from about 2.5 times immediately after the acquisition of Purchasing Power, encouraged the company to resume repurchases. PROG acquired Purchasing Power on January 2, 2026, and has included its results in consolidated results since the acquisition date. At the end of the third quarter, cash was $108.9 million and total debt was $872 million; the company said it had reduced total debt by $326.6 million since the acquisition. Cash was $85.2 million and total debt was $893.7 million at the end of the second quarter, when the company repaid $50 million of acquisition-related debt. During the third quarter, the company repurchased $36.7 million of shares at an average price of $41.47 per share.
Alongside the proposed accelerated agreement, the board added $237.3 million to the existing share repurchase authorization, bringing the total available for future repurchases to $500 million. The board extended the authorization through October 26, 2029. Fourth-quarter guidance calls for revenue of $827 million to $862 million and non-GAAP diluted earnings per share of $1.20 to $1.32. PROG said its quarterly estimates assume continued financial pressure and uncertainty among customers, without a material increase in unemployment within its customer base. The company was scheduled to discuss its third-quarter results on a conference call and webcast on October 28, 2026, at 8:30 a.m. Eastern time.