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Alliance Data Systems Corporation (ADS - Snapshot Report) announced that Companhia Brasileira De Servicos De Marketing, aka CBSM or popularly known as “Dotz," where LoyaltyOne -- an operational segment of Alliance Data -- has a substantial share has initiated its loyalty program in Sao Paolo State Interiors.
This launch will increase the company’s customer base by more than 2.1 million, owing to its presence in Belo Horizonte, Brasilia and now the Sao Paolo State Interior.
The program is similar to that of Canadian AIR MILES Reward Program of LoyaltyOne. Customers with a Dotz collector card are eligible to join the program and collect points through everyday shopping and redeemed thereafter for rewards.
The program is slated to cover 23 cities in the Sao Paolo State Interior. Based on this expansion, Alliance Data expects to add 4 million customers by the end of the fiscal. The company expects further expansion into newer areas of Brazil as Dotz gains momentum.
The loyalty program is set to receive a huge impetus with the joining of Pague Menos and from the middle of the year. Pague Menos operates more than 500 drug stores and has 10,000+ employees, as well as close to equal coverage in the grocery sector by Paulistao, who will also join them. The company announced long-term deals with both entities.
We expect this expansion will aid the LoyaltyOne segment to achieve revenue and adjusted EBITDA growth in the mid single digits.
The quantitative Zacks #2 Rank (short-term Buy rating) for Alliance Data indicates slightly upward pressure on stock over the near term.
Headquartered in Dallas, Texas, Alliance Data Systems Corporation, together with its subsidiaries, provides data-driven and transaction-based marketing and customer loyalty solutions primarily in the United States and Canada. It competes with Discover Financial Services (DFS - Analyst Report).
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