American Express Reports Strong Q2 Profit Amid Affluent Spending

NEW YORK, NY — American Express exceeded Wall Street expectations for its second-quarter earnings, reporting a profit on July 18, driven by strong spending from its affluent cardholders. In a challenging economic environment marked by declining consumer confidence among lower-income individuals, the company’s focus on wealthy customers has proved beneficial.

American Express, known as AmEx, earned $4.08 per share for the three months that ended June 30, surpassing analysts’ expectations of $3.89 per share, according to estimates from LSEG. The company also reported a 9% increase in total revenue, reaching $17.9 billion, exceeding the $17.7 billion that analysts predicted.

Despite these positive results, the New York-based company increased its provisions for credit losses to $1.4 billion, compared to $1.3 billion the previous year. Shares of AmEx rose nearly 1% in early trading and have gained 6.3% this year.

AmEx faces increasing competition in the premium credit card space. Citigroup announced this week it would roll out a new premium card, Citi Strata Elite, aimed at attracting affluent customers. However, AmEx’s Chief Financial Officer Christophe Le Caillec welcomed the competition, stating it could benefit American Express by encouraging customers to explore premium options.

“We’ve been in that space for decades, and we have built assets that our competitors do not have,” Le Caillec said. Later this year, AmEx plans to make a significant investment in refreshing its Platinum cards for both consumers and businesses in the U.S.

AmEx distinguishes itself not only by its credit offerings but also through its ownership of platforms like Resy and Tock, which provide cardholders with exclusive access to 27,000 restaurants. Le Caillec emphasized that this combination of services enhances the value of being an AmEx cardholder.