American Express Reports Solid Growth Amid Economic Uncertainty

American Express continues to display tremendous staying power in the face of worsening economic conditions. The company attributed this to a major increase in spending among its cardholders. The firm announced that, during that same quarter, restaurant inflation jumped 8%. This explosive growth reflects a new consumer thirst for restaurant experiences. Business charged on American Express cards jumped 6%. Adjusting for the leap year’s effects, that increase turned out to a remarkable 7%.

The financial services firm has stuck to its expanded guidance for revenue growth, now forecasting 8% to 10% growth. Earnings per share are expected to come in at around $15‐$15.50 this year. This range indicates impressive confidence in the company’s operational performance, despite macroeconomic issues at hand.

Looking at who is doing the purchasing and how, we identify some big patterns between race and ethnicity. While spending by Generation X cardholders surged by 5%, Baby Boomer cardholders increased their spending more modestly, at 1%. Looks like younger cardholders are leaving their footprints! Millennials and Generation Z drove amazing growth, increasing spending by 14% over the quarter. This demographic trend has been central to American Express’s recent surge in transaction volume.

The stock markets took a steep dive and fears of recession mounted, in part because of President Donald Trump’s tariff policies. Abysmal as these prospects sounded, transaction volumes for American Express still marched upwards. The wealthy cohort of cardmembers continue to be very active, with no indication they are planning to pull back on their levels of spending. Airline deals are up 3% this quarter. Correcting for the leap year, they go up to 4%. This growth appears underwhelming compared to the growth seen in other industries.

Many companies have had to adjust guidance based on the continuing macroeconomic environment. They flagged significant risks due to the changing economy in their most recent statement. This company’s ability to continually overcome these challenges while still growing top and bottom line metrics is a testament to their strong market position.