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Investing.com -- PROG Holdings Inc (NYSE: PRG) shares fell sharply by 17% as the company’s first-quarter and full-year 2025 guidance fell short of Wall Street expectations, overshadowing its fourth-quarter earnings beat.
The Salt Lake City-based fintech holding company, which includes Progressive Leasing and Vive Financial among its brands, reported a fourth-quarter earnings per share (EPS) of $0.80, slightly higher than the analyst estimate of $0.77. Revenue for the quarter was $623.3 million, surpassing the consensus estimate of $614.39 million and marking an 8.0% increase from the same period last year.
Despite the positive fourth-quarter performance, PROG Holdings projected a Q1 2025 EPS of $0.80-$0.85, which is below the analyst consensus of $0.99. Additionally, the company’s revenue forecast for Q1 2025 is set at $665-685 million, compared to the consensus estimate of $682.2 million. For the full year of 2025, PROG Holdings anticipates an EPS of $3.10-$3.50, significantly lower than the consensus of $3.88, with revenue expectations of $2.52-2.59 billion, under the consensus estimate of $2.62 billion.
The company’s President and CEO, Steve Michaels, highlighted the success of 2024, attributing it to strong gross merchandise volume (GMV) growth, disciplined management, and strategic execution. However, the 2025 outlook assumes a challenging operating environment with a soft demand for consumer durable goods.
Analyst reactions to the results and guidance were mixed. TD Cowen’s Hoang Nguyen remarked, "Overall, we view the print as somewhat negative given the initial weaker 2025 guidance, though 4Q results were solid." Bradley B. Thomas from Keybanc noted improved sequential performance but pointed to the bankruptcy of Big Lots (NYSE:BIG) as a significant headwind for 2025, stating, "While the Company has not quantified the impact of the Big Lot’s bankruptcy (resulting in significant store closures), we believe this is the biggest headwind in 2025."
Investors reacted to the conservative guidance for the upcoming year, despite the company’s solid fourth-quarter performance, which included a 9.1% YoY growth in Progressive Leasing’s GMV and a net earnings increase to $57.5 million from $18.6 million in the previous year. The company also continued its share repurchase program, buying back $40.5 million of stock in the fourth quarter.
PROG Holdings’ outlook reflects caution in a market that remains uncertain about consumer spending patterns, especially in the durable goods sector. As the company navigates through these challenges, shareholders are keenly watching how its strategic initiatives will unfold in the face of the forecasted headwinds.
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