Despite a shaky global economic outlook, American Express remains in strong condition, according to its CEO, Stephen Squeri. The company reported a 7.5% year-over-year increase in total billed business on its cards during the first quarter. This increase, driven primarily by Gen Z and millennials, contributed to an 8% rise in revenue, which reached $17 billion.
CEO Stephen Squeri noted that spending, particularly among the company’s affluent customer base, continues to be robust. He explained to Yahoo Finance that spending in the early part of the quarter matched or slightly exceeded that of the previous quarter, with credit indicators remaining positive.
The company’s performance was boosted by strong spending at restaurants and hotels, though there was a slight decline in the airlines category. Squeri also indicated that the financial results were not impacted by any “pull forward” effects, where delayed purchases might artificially inflate earnings.
American Express added 3.4 million new cardholders in the quarter, with 60% of these new customers being Gen Z and millennials. These younger demographics increased their spending by 14%, while Gen X and baby boomers increased theirs by 5% and 1%, respectively, as reported by CNBC.
Traditionally viewed as a card for the older affluent class, American Express is increasingly attracting younger users drawn by its “lifestyle” perks. In 2023, 75% of new consumer platinum and gold accounts were opened by Gen Z and millennials, according to Fortune.
The company is targeting younger consumers through enhanced restaurant and hotel benefits. Squeri highlighted increased dining expenditures among Gen Z and millennials, supporting these trends with acquisitions of reservation services Resy and Tock and the relaunch of the Gold Card, which has been positioned as “the Restaurant Card” due to its related perks.
Amid discussions of a potential upcoming recession, Squeri remained optimistic about American Express’s growth prospects for the year, maintaining a revenue growth forecast of 8% to 10%.
