American Express is currently performing well, even as global economic conditions remain uncertain. CEO Stephen Squeri reported a 7.5% increase in total billed business on Amex cards year over year, with new card growth primarily driven by Gen Z and millennials, who constitute the majority of new customers.
The company recently announced an 8% year-over-year rise in revenue for the first quarter, reaching $17 billion, surpassing expectations. This performance was mainly attributed to spending among the company’s affluent clientele. Squeri noted that spending patterns had remained robust, even stronger than in the previous quarter, and that credit conditions were favorable.
While spending on restaurants and lodging remained strong, there was a minor decline in airline-related spending. Squeri confirmed that “pull forward,” the notion that spending from late 2024 could be artificially boosting current earnings, had not impacted the company.
American Express acquired 3.4 million new cardholders in the quarter, with 60% being from Gen Z and millennials, who increased their spending by 14%. In comparison, Gen X and boomers increased their spending by 5% and 1%, respectively, according to CNBC. The brand, traditionally associated with older, affluent customers, is gaining popularity with younger demographics due to its lifestyle benefits. In 2023, 75% of new consumer platinum and gold accounts were opened by Gen Z and millennials.
To cater to these younger customers, Amex has enhanced restaurant and hotel perks, supported by acquisitions of reservation apps Resy and Tock and the relaunch of the Gold Card. Squeri mentioned that the Gold Card could have been renamed “the Restaurant Card” due to its dining perks.
Despite some predictions of an impending recession, Squeri expressed confidence in Amex’s continued strong performance for the remainder of the year, reaffirming the company’s forecast of 8% to 10% revenue growth.
This information was originally published on Fortune.com.
