Bread Financial Q1 2020 Earnings Report
Key Takeaways
Alliance Data reported a 4% increase in revenue for the first quarter, but earnings were negatively impacted by a $404 million increase in the provision for loan losses due to CECL adoption and COVID-19. The company is focused on maintaining liquidity and managing costs during the economic uncertainty.
Revenue increased by 4% year-over-year, driven by positive momentum in January and February.
Earnings were negatively impacted by a $404 million increase in provision for loan losses due to CECL adoption and COVID-19.
The company has implemented business continuity plans and teleworking protocols for over 95% of global associates.
Alliance Data is focused on strengthening its financial position through cost reductions and proactive management of its business.
Bread Financial
Bread Financial
Bread Financial Revenue by Segment
Forward Guidance
Due to the uncertainty of the pandemic's duration and impact, Alliance Data has suspended its previous guidance for 2020, but they are confident in managing through the crisis effectively.
Positive Outlook
- Business is fully operational.
- Credit card portfolio is more diversified and better positioned than in 2009.
- Company is in a stronger financial position with significant liquidity and borrowing capacity.
- Recession readiness program implemented to address lower credit sales and higher delinquencies.
- Prioritized strategic investments in data, information management, and digital customer-facing products and capabilities.
Challenges Ahead
- Difficult to project the duration of the pandemic and its impact on full year results.
- Suspension of previous guidance for 2020.
- Lower credit sales and higher delinquencies.
- Difficult to project the recovery rate of retail spending post-COVID-19.
- Adjusting the timing of significant coalition and sponsor-specific promotions and marketing programs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income