American Express (AXP) experienced a decline in its stock price following its latest earnings report, despite the results exceeding analyst expectations. The report comes at a time when U.S. households are grappling with rising fuel costs, reflecting a broader economic challenge. However, the resilience of American Express’s business has become evident, particularly in consumer spending trends.
In an interview shortly after the earnings release, American Express CEO Stephen Squeri highlighted several impressive statistics that underscore the company’s robust performance. Notably, there was an 18% increase in spending on retail luxury goods and a 12% boost in premium cabin air travel, alongside record-high global travel bookings. “That tells you they don’t care about gas prices,” Squeri remarked, emphasizing a continued appetite for spending despite economic pressures.
The company’s revenue rose by 11% from the previous year, reaching $18.91 billion, surpassing the consensus estimate of $18.62 billion. Earnings per share also saw a significant increase, up 18% to $4.28 compared to the estimated $4.03. American Express reported a 10% year-over-year growth in billed business, reaching $428 billion, outperforming the expected $420.57 billion.
Delving into specific spending categories, American Express noted an 11% increase in retail, an 18% rise in luxury goods, and a 9% boost in restaurant sales. Spending in premium airline cabins also grew by 12%. Committed to its long-term vision, American Express reiterated its sales forecast for 2026, projecting growth between 9% and 10%, with earnings per share expected to range from $17.30 to $17.90.
Notably, the company announced a planned increase in the annual fee for its prestigious Platinum Card, raising it from $695 to $895 starting on September 23, 2025. This hike is anticipated to bolster the company’s financial performance in the coming quarters.
In his conversation with Yahoo Finance, Squeri expressed a positive outlook, suggesting that consumer resilience is stronger than many economists perceive. “We’re not representative of the economy,” he stated, noting that the premium consumer segment continues to engage in discretionary spending. This includes dining out, lodging, and travel expenditures.
Advanced travel bookings, according to Squeri, are a promising indicator of ongoing consumer spending behavior. “They continue to book in advance. So only time will tell what will happen, but we feel really confident,” he concluded, reflecting a cautiously optimistic view on future consumer spending patterns.
As American Express navigates these economic waters, its focus remains on leveraging consumer trends and adapting to a changing marketplace.
