American Express sailed past Wall Street expectations for first-quarter profit on Thursday, as strong spending by affluent customers lifted card spending growth to its highest in three years.
Elevated interest rates and concerns about inflation spiking due to higher gasoline prices dominate the backdrop, but AmEx’s business is more insulated thanks to the financial flexibility of its largely wealthy customer base.
“Very strong growth across the board,” Chief Financial Officer Christophe Le Caillec told Reuters in an interview. “I think in goods and services, the highlight is retail spend (which) was up 11 per cent and when you look at luxury retail, it’s up 18 per cent.”
AmEx shares were last up about one per cent in premarket trading after it reported a profit of US$4.28 per share in the three months ended March 31, beating estimates of $4.02, according to LSEG data.
Billed business, a measure of total spending on AmEx cards, rose nine per cent to $428 billion, on a foreign exchange-adjusted basis. Its revenue rose 10% to $18.9 billion in the quarter.
“Resiliency continued into the March quarter. Overall results were solid as billings growth accelerated,” analysts at William Blair wrote in a note.
American Express has in recent years stepped up investments in marketing, digital capabilities and rewards programs to attract younger Gen Z customers as long-term cardholders.
The company’s results are closely watched as they offer an early read on spending trends for the quarter at U.S. card firms.
AmEx set aside $1.3 billion in consolidated provisions for credit losses in the quarter, versus $1.2 billion a year ago.
“Credit numbers are incredibly strong... we see no noise or concerns there,” Le Caillec said.
Airline volumes weather war disruption
Within the travel and entertainment segment, airline spending rose eight per cent at AmEx, despite widespread disruption to global travel routes and higher fares following airspace closures and fuel supply shocks linked to the Iran conflict.
“Towards the end of the quarter, we saw some movement and some noise in airline volumes because of the war in the Middle East, there were a lot of refund requests that we got,” Le Caillec said.
But he added that the company still saw “very strong performance from an airline standpoint,” referring to the overall first-quarter growth in the segment.
The company reaffirmed its 2026 guidance, expecting revenue growth of 9% to 10% and full-year profit in the range of $17.30 to $17.90 per share.
(Reporting by Manya Saini in Bengaluru; Editing by Devika Syamnath)
