Archive photo: A furniture display, not identified as a PROG Holdings retail partner. Наталья Маркина/Pexels (cropped)
PROG Holdings cut its full-year revenue and earnings forecasts Wednesday, citing continued financial pressure on its consumers, even as an acquisition helped lift third-quarter revenue by 25.6%.
The Salt Lake City company, which owns lease-to-own provider Progressive Leasing, now expects 2026 revenue from continuing operations of $3.015 billion to $3.050 billion, down from its previous range of $3.025 billion to $3.100 billion, according to its earnings release.
Company takes a more cautious view of its consumers
PROG lowered its adjusted EBITDA forecast from continuing operations to $345 million to $355 million from $355 million to $375 million. It cut its non-GAAP diluted earnings-per-share forecast from continuing operations to $4.70 to $4.85, from $4.75 to $5.00.
Its GAAP diluted EPS forecast from continuing operations is now $3.78 to $3.93, compared with $3.82 to $4.06 previously.
The company attributed the reductions to ongoing macroeconomic pressures on many of its consumers. The outlook assumes conditions remain broadly consistent with the current environment, with no meaningful increase in unemployment among its consumer base.
Acquisition boosts revenue while Progressive Leasing weakens
Third-quarter revenue was $725.8 million. The result includes Purchasing Power, which PROG acquired January 2, so the 25.6% increase is not an organic-growth figure.
GAAP net earnings from continuing operations rose to $37.5 million from $32.3 million a year earlier. Diluted EPS from continuing operations increased to 92 cents from 80 cents. Non-GAAP diluted EPS from continuing operations was $1.06, compared with 87 cents.
Adjusted EBITDA from continuing operations, a non-GAAP measure, increased to $80 million from $65.7 million. Its margin narrowed to 11.0% of revenue from 11.4%.
At Progressive Leasing, revenue fell 0.7% to $552.7 million. Adjusted EBITDA declined 12.3% to $56.5 million, despite a 2.3% increase in gross merchandise volume to $420.4 million.
Four, the company’s buy-now-pay-later business, reported revenue of $37.2 million, up 113.8%, and adjusted EBITDA of $11.4 million. Purchasing Power contributed $131.8 million in revenue and $12.9 million in adjusted EBITDA.
Buyback authority rises to $500 million
The board added $237.3 million to PROG’s share-repurchase authorization, bringing the amount available for future repurchases to $500 million, and extended the program through October 26, 2029.
PROG said it intends to enter a $100 million accelerated share-repurchase program in the fourth quarter, but cautioned that it might not do so. Its non-GAAP EPS outlook assumes that program begins and reflects an initial delivery of about 80% of the shares to be repurchased, excluding any remaining shares delivered at final settlement.
The company repurchased $36.7 million of stock during the third quarter. It ended the period with $108.9 million in cash and $872 million in gross debt.
JBizNews Desk | Salt Lake City
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