Alliance Data Systems (ADS) Tops Q2 EPS by $1.62

Alliance Data Systems (NYSE: ADS) reported Q2 EPS of $5.47, $1.62 better than the analyst estimate of $3.85. Revenue for the quarter came in at $1.01 billion versus the consensus estimate of $1.04 billion.

2021 OUTLOOK:

"First half results represent a strong foundation on which to build continued revenue growth, as receivables gain traction and LoyaltyOne activity increases in the second half of this year. We remain keenly focused on the execution of our strategy, focused on balancing growth and profitability to ensure the sustainable economics of our portfolio.

"Assuming continued strength in the U.S. economy, we are increasing our 2021 credit sales forecast to a double-digit growth rate and now expect a net loss rate in the low 5% range for the year," said Mr. Andretta. "Based on our current visibility and payment rate expectations, receivables at year-end 2021 are projected to be in line with year-end 2020 levels, although average receivables are expected to be down mid-single-digits for the year, reflecting the year-over-year pressure in the first half of 2021 and elevated payment rates. We expect to resume high-single-digit to low-double-digit average receivables growth in 2022. Total revenue for the year is anticipated to be down low-single-digits compared to 2020 as the impact from lower receivables is partially offset by improving revenue from LoyaltyOne and the Bread acquisition. We expect efficiencies to enable us to keep total expenses, excluding provision for loan loss, flat year-over-year while we continue to fund initiatives to position the company for future growth. In 2021, we are investing over $100 million in digital innovation and technology enhancements and $50 million in marketing to support growth and a return to positive operating leverage in 2022.

"We remain on track for the successful spinoff of our LoyaltyOne segment, with completion expected by year-end 2021, positioning both companies to pursue their respective unique growth opportunities and build long-term stockholder value."

For earnings history and earnings-related data on Alliance Data Systems (ADS) click here.

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