What happened

PROG Holdings (PRG 2.99%) reported better-than-expected fourth-quarter results and gave an upbeat forecast for the current quarter. The numbers are going over well on Wall Street, with shares of the fintech company up as much as 12% on Wednesday.

So what

PROG is a holding company with a number of brands trying to modernize consumer lending. The company owns Progressive Leasing, which does app-based and in-store lease-to-own solutions, as well as revolving credit source Vive Financial and buy now, pay later specialist Four Technologies.

Those brands performed well over the holiday season. PROG reported fourth-quarter earnings of $0.84 per share on revenue of $612.1 million, easily topping analyst expectations for $0.59 per share in earnings on sales of $600 million.

It is a dangerous time to be a consumer lender, but PROG Holdings appears to be benefiting from decisions made last year in preparation of potential economic softness.

"Our fourth-quarter results exceeded both our top- and bottom-line expectations, primarily driven by decisions made in the first half of 2022 to improve our portfolio performance and adjust our cost structure in the face of macroeconomic headwinds," CEO Steve Michaels said in a statement. "During the quarter, we saw continued improvement in the quality of our lease portfolio as a result of these decisioning changes, and we were able to deliver write-offs within our targeted annual range for 2022 despite the pressures facing our consumers."

Now what

PROG sees earnings coming in at between $0.82 and $0.88 per share in the current quarter, significantly ahead of the consensus $0.63-per-share estimate. For the year, it forecasts earnings of between $2.11 and $2.54 per share, compared to analyst expectations for $2.48 per share.

Michaels said he doesn't expect the economy to improve overnight but added, "We believe that our market leadership and financial strength will allow us to navigate through this uncertain period, continue to broaden our partner base, and position us to capitalize on increased consumer demand when the current macroeconomic headwinds subside."

Time will tell, and these remain dangerous conditions for consumer-focused lenders. But so far, PROG is holding up well, and investors are buying in as a result.