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Alliance Data (ADS) Inks Deal, Drives Client Relationships

Alliance Data Systems Corporation 's ADS Columbus, OH-based card services business entered into a multi-year agreement with Academy Sports + Outdoors. Per the deal, the former will be offering private label credit card services to the latter, a sports, outdoor and recreation lifestyle retailer. This apart, the newly introduced card services business will provide integrated marketing services to lend support to Academy brand's growth.

Academy brand is well-known for its commitment toward making the process of participating and enjoying sports and outdoor activities simpler for everyone. Operating in more than 245 locations, customers are spoilt for choice when it comes to distinctive product assortment at comparatively low prices from leading sports and outdoors brands.

With the launch of this new private label credit card program, Alliance Data is anticipated to boost customer loyalty for the Academy brand as well as further improve its top line growth with the help of data-driven insights. This innovative card program will utilize Alliance Data's digital and mobile experience gained over a considerable period of time and feature a simplified application procedure through its new credit card acquisition tool, namely Frictionless Mobile Credit as well as Driver's License Instant Credit. These in turn, will help create a quick apply-and-buy experience for qualified clients.

Alliance Data's stellar track record across retail sectors bears testimony to the company's leadership position in the marketing and loyalty space. The new private label credit card program will help the Academy brand leverage Alliance Data's expertise in offering customers a streamlined application process while also improving its customer loyalty and experience plus adding a substantial value to the same. Moreover, the new card services program will enable the Academy brand to remain focused in its objective of achieving excellent growth.

With this partnership, Alliance Data will be enhancing its client relationships, sharing the same commitment as Academy brand's. Alliance Data's contribution to the Academy brand's top-line growth will be vital for the company as it will also boost its organic growth. The financial transaction services provider has been focusing on making the most of the opportunities from the current trend in consumer-based business of shifting its marketing spend to data-driven marketing strategies. These in turn will drive organic growth, a major catalyst for Alliance Data's revenues. In fact, the company projects revenues of $8.2 billion for 2018, up 10% on a year-over-year basis.

Shares of this Zacks Rank #3 (Hold) financial transaction services provider have rallied 14.7% in a year's time, underperforming the industry 's surge of 35.1%. However, we expect higher revenues, solid card services performance, strategic initiatives and a robust capital position to turn the stock around in the near term.

Stocks to Consider

Some better-ranked stocks from the finance sector are WEX Inc. WEX , EVERTEC, Inc. EVTC and American Financial Group, Inc. AFG , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

WEX Inc. provides corporate card payment solutions in North and South America, the Asia Pacific and Europe. The company delivered positive surprises in all the trailing four quarters with an average beat of 2.97%.

EVERTEC, Inc. engages in transaction processing business serving financial institutions, merchants, corporations and government agencies in Latin America and the Caribbean. The company pulled off positive surprises in three of the previous four quarters with an average positive surprise of 11.84%.

American Financial Group provides property and casualty insurance products in the United States. The company came up with positive surprises in all the preceding four quarters with an average earnings surprise of 22.82%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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