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American Express (AmEx) is experiencing a robust performance among its affluent cardmembers, who show little indication of reducing their spending habits. In a recent interview with CNBC, Chief Financial Officer Christophe Le Caillec noted that younger customers played a significant role in driving growth during the first quarter, resulting in a 6% increase in billed business on AmEx cards. This figure rises to 7% when accounting for the effects of the leap year.
The upward trend in spending, which began late last year, appears to be sustained into 2025. Le Caillec observed that these patterns have persisted in April, despite recent volatility in the stock market linked to concerns over President Donald Trump’s tariff policies potentially leading to a recession.
This resilient spending behavior among wealthier customers might insulate AmEx from broader economic worries, particularly as Synchrony Financial, known for its retail credit offerings, has cautioned about a possible slowdown in consumer spending.
“Despite the existing news and economic climate, there’s a notable strength and stability,” Le Caillec remarked.
Interestingly, the growth for AmEx has been predominantly among younger generations. Millennial and Gen Z cardholders reported a remarkable 14% increase in spending during the quarter, while Gen X and Baby Boomer customers displayed more conservative spending habits, with increases of 5% and 1%, respectively.
Le Caillec indicated that it remains unclear whether some cardmembers are accelerating their purchases in anticipation of future tariffs, a point also raised by JPMorgan executives. However, he suggested that some small businesses may be stocking up on inventory due to concerns about rising costs related to tariffs.
Airline slump
Amid these trends, one particular area has bolstered Le Caillec’s confidence about the sustainability of spending patterns.
“Restaurant spending has seen an 8% increase,” he highlighted. “As this is a quintessential discretionary expense that cannot be easily pre-purchased, it serves as a strong indicator of our cardmembers’ confidence and spending capability.”
Conversely, airline transactions presented a notable challenge during this period, revealing an increase of only 3%, or 4% after leap year adjustments, a stark decline from the 13% growth observed in the fourth quarter. This downturn reflects the uncertainties affecting consumer behavior in travel sectors.
While various companies, including airlines and retailers, have reduced their earnings forecasts due to tariff-related uncertainties, AmEx remains steadfast in its outlook. The company is maintaining its revenue growth projection of 8% to 10% and is targeting earnings per share between $15 to $15.50 for the year. Nevertheless, it has added a new disclaimer to its guidance, indicating that these projections are “Subject to the Macroeconomic Environment.”
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