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Mar 31, 2021
Bread Financial Q1 2021 Earnings Report
Alliance Data's first quarter results represented a positive start to the year, reflecting continued sequential improvement in business conditions and the success of ongoing business transformation strategies.
Key Takeaways
Alliance Data Systems Corporation reported a net income of $286 million, or $5.74 per diluted share, for the quarter ended March 31, 2021. Revenue decreased by 21% year-over-year, while EBT increased by 1,452%, positively impacted by a net reserve release of $165 million.
Net income of $286 million driven by strong credit management and a favorable economic outlook with a $165 million net reserve release.
Stable year-over-year credit sales aligned with improved consumer confidence and in-store sales recovery.
Bread and Fiserv announced a strategic partnership to leverage Fiserv’s merchant network and drive platform sales and receivables growth.
Launched first card brand partner on Bread’s platform, pursuing cross-sell opportunities and investing in Bread’s fintech capabilities.
Forward Guidance
Alliance Data expects credit sales to increase at a high-single- to low-double-digit rate in 2021, with a net loss rate below 6% for the year. Total revenue is anticipated to be down low-single-digits compared to 2020.
Positive Outlook
- Credit sales are expected to increase at a high-single- to low-double-digit rate.
- Net loss rate is expected to be below 6% for the year.
- Expect to resume high-single-digit to low-double-digit card receivables growth as we enter 2022.
- Improving revenue from LoyaltyOne and the Bread acquisition.
- Return to positive operating leverage in 2022.
Challenges Ahead
- Total revenue is anticipated to be down low-single-digits compared to 2020.
- Average receivables are expected to be down mid-single-digits for the year, reflecting year-over-year pressure in the first half of 2021.
- Impact from lower receivables.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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