American Express It has long been benefiting from focusing on wealthy customers who appreciate travel and dining perks from credit card companies.
It helped quarantine the company from concerns about slowing spending. In the second quarter, AMEX Card total spending rose 7%, coinciding with the first quarter, which exceeded the 6% increase a year ago.
But travel expenses for the quarter were weaker than commerce in goods and services, which specifically stated on Friday, as airline spending has been stagnant and has been flat for a year.
Economy-class domestic airfares are a source of weaknesses, Amex CFO Christophe Le Cailec told CNBC.
That could be a concern given the company’s airline partnership and the airport lounge network, Trist analyst Brian Forlan pointed out.
Airfare prices have also fallen, which means consumers are spending less when purchasing tickets. According to the Bureau of Labor Statistics, airfares fell 3.5% in June from a year ago, but overall inflation rose.
Despite beating expectations for second-quarter earnings and revenue, and reaffirming the 2025 guidance for these metrics, AMEX shares fell 2.7% in noon trading. Every year, the company’s shares rise below 4%, chasing most other finances jpmorgan chain and Citigroup.
This is more of a concern than investors’ concern about spending on the compensation programme Amex has to do when launching a refreshed Platinum card, Foran said. The company faces growing competition in JPMorgan’s premium card space. Capital 1 And Citigroup, he said.
“The bear story is that they have to push harder and stronger to get growth.
