American Express recently reported its third-quarter earnings, revealing a robust increase in card spending, particularly among Generation Z and millennial consumers. The company’s overall card spending grew by 9%, with notable strength in retail sectors and travel-related expenditures.
During a conference call with analysts, CEO Steve Squeri highlighted the success of the newly refreshed U.S. consumer and Business Platinum Cards, stating that initial customer interest and engagement had exceeded company expectations. He noted that the Platinum Card franchise alone represented approximately $530 billion in annual spend globally.
The earnings report also indicated that the percentage of card member loans overdue remained stable at 1.3%. Chief Financial Officer Christophe Le Caillec provided further insights, revealing that delinquency rates for U.S. consumers and small businesses were below pre-pandemic levels. Retail spending surged by 12%, with restaurant spending increasing by 9%. Premium travel and entertainment bookings displayed notable momentum, particularly with a 14% rise in spending on front-of-cabin airline tickets.
Younger customers are contributing significantly to this spending growth. Together, millennials and Gen Z now account for 36% of total spending, matching the share held by Generation X. Transactions among these younger cohorts rose by 13%, with the average number of transactions per U.S. customer being approximately 25% higher than that of older generations.
Le Caillec revealed that following the refresh of their card offerings, the credit profiles of new consumer applicants improved, with average FICO scores climbing by 15 points. For the full year, the company anticipates revenue growth between 9% and 10%.
Shares of American Express responded positively, rising by 5% during intraday trading. When asked about the sustainability of the current spending momentum, Squeri noted the stability observed over the last several quarters but refrained from making definitive predictions about future billing trends. He emphasized the unique characteristics of their cardholder base, which tends to be more premium than the average consumer segment, suggesting that spending patterns may not reflect broader economic trends.
Small business spending also showed promising growth, increasing by 4%. Looking forward, Squeri expressed optimism about retail spending, particularly within the U.S. consumer market, viewing it as a positive indicator for the upcoming holiday season.
