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Alliance Data to Offer Credit Card Services to Carter's Unit

Zacks Equity Research

Alliance Data Systems Corporation’s ADS card services business has inked a deal with the U.S. Retail segment of Carter's, Inc. CRI to provide credit card services to the latter. The agreement with Alliance Data will make Carter’s credit application process quick and seamless.

Carter's is North America's largest branded marketer of apparel exclusively for babies and young children. This agreement will enable Carter’s to take advantage of Alliance Data's innovative suite of digital capabilities. Alliance Data will create a data-driven credit card program for Carter's that will combine the latter’s present rewards program, Rewarding Moments and will thus enhance the shopping experience for Carter's customers. Also, Carter’s customers may apply for credit in store through a text message. All these will help Carter’s customers earn more rewards points.

Alliance Data’s Card Service segment accounts for the lion’s share of the company’s total revenues. Continuous agreements with both new and existing clients are favoring private label card portfolio.

Organic growth remains a key growth driver at Alliance Data. We believe the company will retain its revenue momentum in the coming quarters with ample opportunities from the current trends in consumer-based businesses. It will shift its marketing spend to data-driven strategies. The company estimates 2019 revenues to grow 4% year over year to $5.8 billion.

Shares of this Zacks Rank #3 (Hold) financial transaction services provider have lost 4.5% year to date against the industry’s rally of 28.3%. Nonetheless, we expect higher revenues, a solid card services performance, strategic initiatives as well as a robust capital position to aid the company’s turnaround in the near term.

Stocks to Consider

Some better-ranked financial transaction service providers are Cardtronics plc CATM and Global Payments Inc. GPN.

Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. The company delivered positive surprise of 40.00% in the last reported quarter. The stock sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank  stocks here.

Global Payments provides payment technology and software solutions for card, electronic, check, and digital-based payments. The company delivered positive surprise of 3.08% in the last reported quarter. The stock carries a Zacks Rank #2 (Buy).

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Cardtronics PLC (CATM) : Free Stock Analysis Report
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