Consumer spending on goods and services continued to grow while spending on travel and entertainment declined, said the company CFO.
American Express generated record second-quarter revenue amid strong spending by cardholders, the company said in a July 18 statement.
For Q2 ending June 30, Amex brought in $17.85 billion in total revenues after interest expenses, up 9 percent compared to the same period in 2024. However, its net income registered a drop of 4 percent, and diluted earnings per share fell 2 percent.
Shares of the company ended Friday down by roughly 2.3 percent. Overall, so far this year, Amex shares are up by around 2.65 percent, having largely moved within a price range of $220 to $330 per share during this period.
According to the company, the 9 percent jump in revenues was “primarily driven by increased Card Member spending, higher net interest income supported by growth in revolving loan balances, and continued strong card fee growth.”
Because the company’s business model is geared more towards wealthy customers, the higher card spending by Amex users suggests robust consumer spending among high-net-worth groups. It also indicates sustained customer appetite for premium goods and services.
Nearly four out of 10 U.S. citizens with a net worth higher than $1 million have an Amex card, according to a Feb. 25 study by financial services company Motley Fool.
During a July 18 earnings call, Amex CEO Stephen J. Squeri said that total card member spending rose by 7 percent, which was “consistent with the pattern we’ve seen this year.”
Christophe Le Caillec, CFO at Amex, said, “Goods and services spending, which accounts for over 70 percent of our business, continued to grow at a similar pace to Q1.”
Restaurant spending remained strong, up 8 percent after adjusting for foreign exchange.
However, spending on travel and entertainment “was down a bit versus Q1 driven by softer airline and lodging spend,” Le Caillec said.
Squeri said that while airline and lodging spending are slowing down a bit, overall spending remains consistent among customers.
“Goods and services continue to be resilient and, you know, our Gen Zs and our millennials continue to be consistent,” he said.
