Synchrony Financial (NYSE:SYF) Q1 2024 Earnings Call Transcript

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Brian Wenzel: Yeah. Again, I’m going to just say it again. We put that guidance out 45 days ago. I didn’t feel a need to or nor I think, Brian, feel a need to put it back on this page or two, kind of update it. Again, what I’ve said is, the quarter — in the points I raised about net interest margin, losses, reserves, positive on expenses, I think should be viewed favorably relative to that kind of base BAU performance of the business. So we’re very — we’re pleased on how we’re exiting out of the first quarter and moving in on a core BAU basis.

John Pancari: Okay, Brian. Thanks for walking through that again.

Brian Wenzel: Great. Thanks. Have a good day.

Operator: And we are almost at our allotted time. We will take one final question from Mihir Bhatia with Bank of America. Please go ahead.

Mihir Bhatia: Hi. Thank you for squeezing me in and good morning. Just wanted to — just two big picture questions. Maybe to start, first just on the competitive situation and really more, not so much necessarily on the new programs, but just in terms of the financing offers that are already out there for consumers. Has the purchase volume been impacted at all by consumers just having more choices today? Like are there any market share or penetration rate statistics you can share in terms of how often consumers are turning to Synchrony versus others as a percent of your retailer partner sales or anything like that? I’m sure you track it.

Brian Doubles: Yeah, we do. We track it by partner. We look at the penetration rate, sales on our card versus other products. I’ll tell you, generally, we’re very pleased that inside of the majority of our partner programs that we’re gaining share. I think one of the things that helps us do that, as we think about a multiproduct strategy, we see our partners engaging more on being able to offer a revolving product, maybe a secured card, buy now pay later. And I think that’s helping us gain share. If you stick to a one-product strategy, I think over time that’s a losing strategy and I think you will lose share, which is why we think the multiproduct strategy over time is a winning one. So we feel really good about our ability to continue to take share inside of our partner programs, but also just more generally and even some of the smaller to mid-sized space.

Mihir Bhatia: Got it. Thank you. And then, Brian, just last question. In terms of your — in the prepared remarks, I think in the press release today, you highlighted the partnership with small and medium-sized businesses as well as health providers. I think the emphasis — there’s a little bit of a new emphasis on the small and medium-sized businesses relative to the old ones. I was just curious, is the growth focus at Synchrony switching a little bit to smaller, or maybe the more proprietary programs versus maybe the historical focus on just being the partner of choice for large retailers?

Brian Doubles: Well, I definitely think that’s an underappreciated part of our business model. I think people tend to focus on the larger partner programs, but we do — we serve hundreds of thousands of providers and small to medium-sized businesses, and sometimes that gets lost a little bit. So we’re definitely leaning in more there. I’d say we’ve shifted investment dollars into the health and wellness space. You see that paying off. When you look at the Health & Wellness numbers, I think receivables are up 20%. Like, we’re really reaping the benefits of those investments. So that’s a very attractive space for us. The large partner space is still very attractive as well. But I think that, that part of the business always gets a lot of attention. We’re trying to make sure that we talk enough about all the small to medium-sized businesses and the hundreds of thousands of dentists and pet care specialists across the country that we serve.

Mihir Bhatia: Thank you.

Brian Doubles: Great. Thanks, Mihir.

Brian Wenzel: Have a good day.

Operator: Thank you. And this concludes Synchrony earnings conference call. You may disconnect your line at this time, and have a wonderful day. Thank you.

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