Sign in

    PROG Holdings (PRG)

    PRG Q3 2024: GMV +11.6% y/y, guides high-single-digit Q4 growth

    Reported on Jun 9, 2025 (Before Market Open)
    Pre-Earnings Price$46.97Last close (Oct 22, 2024)
    Post-Earnings Price$45.01Open (Oct 23, 2024)
    Price Change
    $-1.96(-4.17%)
    • Robust GMV and Q4 Outlook: Management highlighted that Q3 GMV performance not only exceeded expectations but also sets up a high single to low double digit Q4 GMV growth outlook, suggesting continued top‐line momentum.
    • Accelerated Digital Platform Growth: The PROG Marketplace has grown over 300% year-to-date, outperforming guidance and indicating an expanding revenue stream from direct-to-consumer initiatives.
    • Disciplined Portfolio and Credit Management: The team is actively managing its portfolio through strategic decisioning—reflected by a maintained write-off range and a shift toward higher-quality, higher lifetime value customers—which underpins future earnings stability.
    • Retail partner weaknesses: The ongoing struggles of key partners like Big Lots—with bankruptcy and store closures—could result in a 100 to 150 basis point headwind on Q4 GMV, dampening sales momentum.
    • Margin pressure from elevated write-offs: Persistently high write-offs around 7.7% in Q3, compounded by rising delinquencies, may pressure margins if macro conditions worsen.
    • Underperforming key product categories: Certain core categories, such as furniture and mattresses, continue to face significant challenges, potentially limiting long-term growth despite other positive trends.
    1. GMV Impact
      Q: What’s driving GMV performance?
      A: Management highlighted 11.6% YoY GMV growth, noting strong retailer partnerships while facing a 100-150 basis point headwind from Big Lots store closures; the American Signature deal, though launching late, bodes well for 2025.

    2. EPS Outlook
      Q: What boosts Q4 EPS?
      A: They expect robust top‐line growth combined with lower write-offs and disciplined SG&A to improve EPS despite typical seasonal challenges.

    3. Write-Off Seasonality
      Q: Will Q4 write-offs rise?
      A: Contrary to seasonal norms, write-offs are expected to drop from the 7.7% Q3 level due to improved collections and quick decisioning adjustments.

    4. EBITDA Guide
      Q: How can margins improve long-term?
      A: Management noted that as revenue grows, a better customer mix and operating leverage may push margins higher from the current 12% level.

    5. Marketplace Growth
      Q: How is the marketplace performing?
      A: The Progressive marketplace has surged over 300% year-to-date, outpacing its target to double GMV, driven by enhanced technology and targeted marketing.

    6. Trade Down Impact
      Q: Do trade-down customers lower write-offs?
      A: Although these customers tend to opt for higher 90‑day buyouts, overall portfolio performance and rising delinquencies have kept write-offs stable.

    7. EBO Dynamics
      Q: Are quality customers affecting margins?
      A: New, higher-quality customers are more inclined to early buyouts, contributing modestly to margin pressures while promising strong long-term value.

    8. Retail Pipeline
      Q: Any update on new retail partners?
      A: While specifics weren’t disclosed, recent successes like the American Signature partnership indicate a healthy pipeline heading into 2025.

    9. Delinquency Outlook
      Q: What about charge-off trends?
      A: Despite some portfolio-wide increases, delinquencies remain managed within the stable target range of 6%-8%.

    10. Category Trends
      Q: Are product categories stabilizing?
      A: Some segments, such as smartphones, are steady, but key areas like furniture and mattresses still face challenges; overall growth is driven by solid execution and beneficial trade-down dynamics.

    11. Macro Tailwinds
      Q: Will macro trends support growth?
      A: Management believes that persistent consumer demand will continue to drive GMV, even as tighter credit conditions gradually ease.

    12. Long-Term GMV Growth
      Q: What is the medium-term GMV outlook?
      A: There’s significant built-in growth from existing retailers, though further expansion will depend on adding new merchant partners.

    13. Merchant Segmentation
      Q: How does GMV break down by merchant type?
      A: Management did not provide a segmentation between existing and new merchants.

    14. Holiday Promotion
      Q: What’s different about holiday promotions?
      A: Although the holiday season will start earlier and be more pronounced due to calendar shifts, no major underlying demand inflection is anticipated.

    Research analysts covering PROG Holdings.