The news: Bread Financial reported $188 million in net income in its Q3 2025 earnings—roughly flat on the year—while revenues fell 1% to $971 million.

Diving into the results: Similar to other issuers, Bread Financial’s metrics reflect US consumer resiliency:

• Credit sales lifted by 5% to $6.8 billion, buoyed by new partner growth and an upswell of general-purpose spending.
• End-of-period loans were down 2% to $17.7 billion, driven in part by an increasing payment rate.
• Delinquency rates sank YoY to 6%.
• Bread’s net loss rate fell to 7.4%.

Co-branded credit card portfolios tend to be composed of lower-income and credit-thin consumers who are more likely to suffer financial instability during economic shocks, like a new tariff regime. Bread Financial’s Q3 performance suggests this population is remaining largely stable.

Bread’s play for homewares: During Q3, Bread Financial added Bed, Bath, & Beyond; Furniture First; and Raymour & Flanigan to its lineup of co-brand cards. While recent tie-ups like Saks Fifth Avenue and Saks OFF 5th, slotted well into its retail lineup, home retailers aren’t performing as strongly. 

The sluggish US housing market is putting a damper on consumers' ability to buy homes, which hurts furnishing sales down the line. Most of this industry is tepid, with the exception of Wayfair, which clocked its best growth rate since 2021. However, Bread is unlikely to see those kinds of growth rates in its latest partnerships.

Our take: Co-brand issuers need to diversify their portfolios to withstand economic downturns and sector-specific slowdowns. However, issuers need to consider what’s going on in potential new sectors. 

Home goods likely is a low-growth choice based on current outlooks into the housing market, while more resilient industries may be a better play during economic uncertainty.