Bread Financial Cuts 2026 Net Loss Outlook Below 7% as Third-Quarter Credit Improves
Key Facts
Bread Financial raised its 2026 net loss rate outlook to below 7%, marking the second consecutive quarter in which the company improved its annual estimate, alongside its third-quarter results. In its statement, the company said, "We are improving our 2026 net loss rate guidance for the second consecutive quarter and now expect it to be below 7%." The update came as the net loss rate fell to 6.40% in the third quarter, compared with 7.39% in the same period of 2025. The delinquency rate also declined to 5.57% from 6.04% a year earlier. The metrics reflect improved credit quality as the company continues to expect loan and revenue growth during the year.
Bread Financial's third-quarter net income was $156 million, down 17% from a year earlier, while pretax income rose 6%. The company attributed the decline in net income in part to a favorable tax benefit of $38 million in the year-earlier period. It said revenue growth came mainly from loan growth, lower interest expense, and higher merchant and interchange fees. These factors were partly offset by higher merchant revenue-sharing arrangements and lower billed late fees. On October 22, the stock rose 0.74% to $109.43 after the results were announced, according to Investing.com.
Bread Financial expects average loans to rise about 4% in 2026 compared with 2025, and revenue to grow about 5% year over year. These forecasts are based on the assumption that consumer resilience will continue and the labor market will remain generally stable. The outlook for losses below 7% fits this context, combining expected growth in lending activity with recent improvements in loss and delinquency rates. The company has thus improved its annual guidance for two consecutive quarters. These figures remain its estimates for fiscal 2026, while the reported credit rates reflect third-quarter performance.
In the insurance sector, Ategrity Specialty reported third-quarter underwriting income of $19.5 million, up 83.7% from $10.6 million in the same period of 2025. Gross written premiums totaled $165.0 million, up 14.7% year over year. Property premiums rose 25.0%, compared with 10.0% growth in casualty premiums. The combined ratio, which measures claims and expenses against premiums, also improved to a record low of 84.7% from 88.7% a year earlier. The loss ratio declined 2.5 percentage points to 57.5%, according to the company's results.
Ategrity said property premium growth benefited from expansion in lower-risk areas, including the Midwest and New England, and attributed the improvement in the combined ratio to lower loss and expense ratios. Its chief executive said submissions increased 30% and gross written premiums grew about 15%, exceeding estimates for surplus lines market premium growth. Underwriting income measures insurance operations before investment income, placing its growth in the context of underwriting results and the combined ratio. The company also announced the launch of four new specialty products over four weeks. The products cover energy, environmental liability, life sciences, and sports and entertainment.
Getty Realty narrowed its 2026 adjusted funds from operations forecast to a range of $2.53 to $2.54 per diluted share, from a previous range of $2.52 to $2.54. The measure was $0.64 per share in the third quarter, compared with $0.62 in the same quarter of 2025, while the company reported funds from operations of $0.61 per share. It attributed growth in base rental income to additional revenue from recently acquired properties and contractual rent increases on existing leases. Property sales offset part of that growth. The company uses adjusted funds from operations alongside funds from operations, while the announced guidance applies to the adjusted measure for the fiscal year.
Getty Realty supported its expansion with investments of $297.4 million in 68 properties during the third quarter, at an initial cash yield of 6.9%. Its committed investment pipeline also exceeded $75 million as of October 21. In September, the company completed a $260.9 million sale-leaseback transaction with Refuel involving 41 stores, with initial lease terms of 20 years. Getty Realty scheduled its third-quarter earnings call for October 22, 2026, at 8:30 a.m. Eastern Time. The narrower annual forecast comes as the company continues investing in properties and expanding its rental base.