A consumer finance company that issues private label credit cards for major retailers and healthcare providers, offering financing through hundreds of thousands of locations under its Retail Card, Payment Solutions, and CareCredit platforms. It is the largest U.S. private label credit card issuer, with programs for brands like Gap, JCPenney, Lowe's, Sam's Club, and Walmart, and it also runs a direct banking platform that takes deposits to fund its lending.
Q2 2026 net income fell 8.5% to $885M as operational losses and retailer share costs rose
fell 8.5% from a year earlier this quarter. rose 2.3% to $4,745M and was $2.59, with the decline driven by higher and retailer share costs even as net charge-offs improved to 5.43%. The company returned to buybacks with $1.8B repurchased, leaving it profitable but cost-pressured.
Key takeaways
fell 8.5% to $885M as other expense grew 6.9% to $1.3B from higher and technology investment costs, and rose.
rose 1.9% to $4.6B, driven by an 8.5% drop in from lower benchmark rates partly offset by lower liquidity portfolio income.
increased 4.8% to $1.2B due to a smaller , though the improved 27 to 5.43%.
Section summaries
Management's Discussion and Analysis
Net earnings fell 8.5% to $885M on higher operational losses and retailer share costs, while net interest income grew 1.9%.
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rose 1.9% to $4.6B, driven by a 8.5% drop in from lower benchmark rates, partially offset by lower liquidity portfolio income.
Purchase volume increased 8.1% to $49.8B, led by the and platforms at 11.7% and 9.2% respectively.
The company repurchased $1.8B in common stock, issued $500M in new , and raised its quarterly to $0.34 per share.
What changed
Q2 2026 was 5.43%, inside the 5.5%–6.0% target range management set for 2026 and near Q1's 5.42%, confirming the improvement held.
Loan were not stated for Q2 2026 but were flat at $100.1B in Q1; purchase volume rose 8.1% versus Q1's 5.6% increase, showing growth continued.
The new $6.5B program announced in Q1 saw $1.8B used in Q2, against no amount stated for Q1.
rose again after Q1's 19.6% increase to $1.1B, continuing the upward move tied to lower net charge-offs and pricing changes.
grew 1.9% as fell further from the 4.04% Q1 level, extending the decline from the 4.28% 2025 average.
What to watch
Q3 2026 to confirm 5.43% holds inside the 5.5%–6.0% target range.
Pace of the remaining $6.5B program after $1.8B was used in Q2.
Loan level in Q3 after flat Q1 and rising purchase volume.
Retailer share arrangement costs after consecutive quarterly increases tied to lower net charge-offs.
increased 4.8% to $1.2B due to a smaller reserve release, though net charge-offs improved 27 to 5.43%.
Other expense grew 6.9% to $1.3B, primarily from higher operational losses and technology investment costs.
Purchase volume increased 8.1% to $49.8B, with the Diversified & Value and Digital platforms leading growth at 11.7% and 9.2%, respectively.
The company repurchased $1.8B in common stock, issued $500M in new preferred stock, and announced a quarterly increase to $0.34 per share.
Quantitative and Qualitative Disclosures About Market Risk
Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, correlations or other market factors will result in losses for a position or portfolio. We are exposed to market risk primarily from changes in interest rates. We borrow money…
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Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, correlations or other market factors will result in losses for a position or portfolio. We are exposed to market risk primarily from changes in interest rates.
We borrow money from a variety of depositors and institutions in order to provide loans to our customers. Changes in market interest rates cause our net interest income to increase or decrease, as some of our assets and liabilities carry interest rates that fluctuate with market benchmarks. The interest rate benchmark for our floating rate assets is generally the prime rate, and the interest rate benchmark for our floating rate liabilities is generally either the Secured Overnight Financing Rate ("SOFR"), U.S. Treasury bills, or the federal funds rate. The prime rate and the SOFR, U.S. Treasury bills or federal funds rate could reset at different times or could diverge, leading to mismatches in the interest rates on our floating rate assets and floating rate liabilities.
The following table presents the approximate net interest income impacts forecasted over the next twelve months from an immediate and parallel change in interest rates affecting all interest rate sensitive assets and liabilities at June 30, 2026:
Basis Point Change At June 30, 2026
($ in millions)
-100 basis points $ (114)
+100 basis points $ 39
For a more detailed discussion of our exposure to market risk, refer to “Management's Discussion and Analysis—Quantitative and Qualitative Disclosures about Market Risk” in our 2025 Form 10-K.
For a description of legal proceedings, see Note 15. Legal Proceedings and Regulatory Matters to our condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
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For a description of legal proceedings, see Note 15. Legal Proceedings and Regulatory Matters to our condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
There have been no material changes to the risk factors included in our 2025 Form 10-K under the heading “Risk Factors Relating to Our Business” and “Risk Factors Relating to Regulation”.
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There have been no material changes to the risk factors included in our 2025 Form 10-K under the heading “Risk Factors Relating to Our Business” and “Risk Factors Relating to Regulation”.