Seeking to reassure investors that the effects of the recent cyberattack on the email marketing operations of its Epsilon unit will be minimal,
The unauthorized March 30 access to Epsilon's files that exposed millions of consumers' email addresses and names was "certainly bad," Ed Heffernan, Alliance Data's president and chief executive, told analysts in an April 21 conference call. But the incident affected only about 2% of Epsilon's client base.
"E-mail volumes have largely remained at expected run rates," Heffernan said, noting Alliance Data is putting "all hands on deck to continue our efforts to rebuild any damaged client relationships."
Heffernan expects the vast majority of Epsilon clients, if not all, to remain with the company.
Alliance Data also has begun taking steps to add a number of new security layers to its Epsilon email marketing operations and "build Fort Knox" around it, even if it means making the enhanced system "a little less user-friendly and a little less flexible," Heffernan said.
Alliance Data's first-quarter net income surged 85%, to $86.4 million, from a year earlier. Revenue rose 11.6%, to $740.4 million.
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