PROG Holdings Cuts 2026 Outlook Despite 26% Q3 Revenue Growth

PROG Holdings Inc. (NYSE: PRG) reduced its full-year 2026 revenue and earnings outlook, citing ongoing macroeconomic pressure and a challenged consumer, even as the addition of Purchasing Power and growth at Four Technologies drove double-digit increases in third-quarter revenue and profit.

For the three months ended September 30, consolidated revenue from continuing operations rose 25.6% year over year to $725.8 million. Consolidated gross merchandise volume increased 58.9% to $912.0 million, reflecting contributions from Purchasing Power, which is included in the company’s 2026 results, and expansion at Four.

GAAP net earnings from continuing operations increased 16.1% to $37.5 million, while diluted EPS rose 15% to $0.92. Adjusted net earnings advanced 22.2% to $43.0 million, and non-GAAP diluted EPS increased 21.8% to $1.06.

Adjusted EBITDA from continuing operations climbed 21.8% to $80.0 million, primarily due to Purchasing Power and stronger revenue and earnings at Four. However, adjusted EBITDA represented 11.0% of consolidated revenue, down 40 basis points from 11.4% a year earlier.

Diversified businesses support growth

Management said Four delivered profitable, triple-digit growth during the quarter. Purchasing Power performed in line with the company’s expectations as it approached what management described as its most important quarter of the year. The presentation did not provide separate third-quarter revenue or earnings figures for the individual businesses.

Chief Executive Steve Michaels said PROG was taking a more cautious view of consumers through year-end while actively managing portfolio performance amid macroeconomic pressure. The company said its operating fundamentals and balance sheet continued to provide flexibility to invest in the business and return capital to shareholders.

Operating cash flow from continuing operations totaled $392.7 million for the first nine months of 2026. PROG ended September with $108.9 million in cash and cash equivalents and $600 million of gross recourse debt, excluding Purchasing Power’s securitization funding debt. Its net leverage ratio was 1.5 times trailing 12-month adjusted EBITDA.

Outlook lowered as consumer pressure persists

PROG did not include the numerical ranges for its revised full-year outlook in the supplied presentation material, but said it was reducing its fiscal 2026 revenue and earnings ranges because of current macroeconomic conditions and pressure on consumers.

The outlook assumes conditions remain consistent with the current environment through year-end, with no material change in the company’s customer decisioning posture and no meaningful increase in unemployment among its consumer base. It also assumes an effective tax rate of approximately 26% for non-GAAP EPS. PROG provided selective fourth-quarter guidance under the same operating assumptions, though the relevant numerical targets were not included in the supplied material.

The company intends to enter a $100 million accelerated share repurchase program during the fourth quarter. Its non-GAAP EPS outlook assumes the initial delivery of about 80% of the shares expected to be repurchased and excludes any remaining shares that may be delivered at final settlement. PROG cautioned that the transaction may not be completed as anticipated or at all. The board also replenished and extended the existing share repurchase program, while the company continued buying back shares during the third quarter.

PROG identified continued macroeconomic volatility, geopolitical disruption and higher fuel and other costs as material uncertainties. These factors could weaken demand for consumer durables, reduce customers’ disposable income and affect their ability to make lease and loan payments. The company also warned that an uncertain environment could reduce the effectiveness of its approval algorithms and decisioning tools, potentially increasing charge-offs or leaving reserves insufficient to cover losses.

Other risks include Progressive Leasing’s concentration among several major retail partners, the ability of PROG’s businesses to attract and retain partners and customers, competition, regulatory scrutiny, cybersecurity threats and technology-system disruptions. The company also noted that Four and Purchasing Power have business models and risk profiles that differ from Progressive Leasing’s lease-to-own operations.