By Rishab Shaju and Manya Saini
July 24 (Reuters) – American Express beat second-quarter profit estimates and raised its 2026 revenue forecast, helped by strong spending from affluent customers, but its shares slipped on Friday as investors focused on an unchanged profit outlook.
Unlike many rivals that cater to a broader range of borrowers, the credit card issuer derives much of its business from higher-income consumers, who are generally better-positioned to weather inflationary pressures and maintain discretionary spending.
Billed business, a measure of total spending on AmEx cards, rose 9% to $455.8 billion, with travel and entertainment growing 10% over the prior year.
AmEx’s earnings offer an early look at spending patterns among affluent consumers, providing investors with an initial read on discretionary spending before other major card networks report results.
“Six months into the year, we’re seeing stronger momentum than we expected. The investments we made in our value propositions have driven accelerated spend and revenue growth,” said CEO Stephen Squeri in a statement.
The company now expects 2026 revenue to grow 10% — in line with Wall Street expectations, according to estimates compiled by LSEG.
It posted a profit of $4.53 per share for the three months ended June 30, sailing past expectations of $4.40 per share. Revenue rose 10% to $19.6 billion in the quarter.
SPENDING TO GROW
Shares of American Express were down 4.5% in volatile premarket trading as investors looked past the earnings beat and focused on its unchanged full-year profit forecast of $17.30 to $17.90 per share.
Chief Financial Officer Christophe Le Caillec told Reuters the company plans to reinvest its “overperformance” into marketing to support and accelerate growth.
“We see so many opportunities out there for us to invest,” he said, adding that the decision to step up investment was the reason the company left its 2026 profit growth forecast unchanged.
AmEx’s consolidated expenses came in at $14.5 billion in the second quarter, up 12% from a year earlier.
Gen Z and millennial customers have become a key growth engine for American Express, attracted by its premium travel, dining and lifestyle rewards.
The company has doubled down on that strategy through partnerships and new benefits that extend beyond traditional rewards, using travel and dining experiences to distinguish its cards as competition for affluent consumers intensifies.
In June, American Express agreed to buy Tripadvisor-owned restaurant booking platform TheFork for $700 million.
On appetite to do more deals, Le Caillec said, “we’re always on the lookout for investment opportunities.”
(Reporting by Rishab Shaju and Manya Saini in Bengaluru; Editing by Joyjeet Das)
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