American Express’s affluent cardmembers continue to spend robustly, with younger customers driving growth in first-quarter transaction volumes, according to Chief Financial Officer Christophe Le Caillec. Billed business on AmEx cards increased by 6% during the period, or 7% when adjusted for leap year effects, indicating that the spending momentum from late last year has persisted into 2025. Despite recent stock market declines due to concerns over President Donald Trump’s tariff policies potentially causing a recession, these trends have continued into April. This dynamic has helped American Express exceed expectations for first-quarter profits, suggesting that its wealthier customer base may insulate it from tariff and inflation concerns. In contrast, Synchrony Financial, which provides store cards for many popular retailers, has reported a spending slowdown.
Growth at AmEx was particularly strong among younger cardholders, with millennial and Gen Z members increasing their spending by 14%. Meanwhile, Gen X and Baby Boomer cardholders showed more caution, with spending increases of 5% and 1%, respectively. Le Caillec noted that it is challenging to determine whether cardmembers are accelerating purchases due to looming tariffs, as suggested by JPMorgan executives last week. However, some small businesses might be building inventory in anticipation of higher costs. Restaurant spending, up 8%, gives Le Caillec confidence in the durability of spending trends, as this discretionary expense cannot be brought forward. One weaker area was airline transactions, which grew only 3% (or 4% adjusted for leap year), compared to 13% in the fourth quarter. Despite uncertainties, AmEx maintained its guidance for revenue growth of 8% to 10% and earnings of $15 to $15.50 per share this year, though it added a caveat regarding the macroeconomic environment.
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