Latest news with #CardMembers
Yahoo
20-07-2025
- Business
- Yahoo
American Express just offered a rare peek inside the spending habits of wealthy Americans—all the way down to Gen Z
When American Express unveiled its second-quarter 2025 results on Friday, it didn't just announce another round of record-breaking earnings. It offered a rare, high-definition snapshot of how affluent Americans, the premium cardholders at the heart of its business, are faring in a constantly shifting economic landscape. The short answer? Quite well, really. American Express reported record quarterly revenue of $17.9 billion, up 9% year-over-year, as well as total Card Member spending that surged 7% over the same period in 2024 to a new high of $416.3 billion. The company's business model, which heavily skews toward a more affluent customer base, renders these numbers a kind of barometer for upper-income Americans' financial confidence and willingness to spend. Not only are these card members spending more, but they're also showing a renewed appetite for premium products and experiences. Critics have long claimed the 'premium card' phenomenon to be cyclical or overhyped, but American Express is plowing forward with more bells and whistles for its affluent customers. This leads to a significant caveat: expenses rose 14% year-over-year, as the company reinvested in technology and expanded risk management. It also cited 'higher variable customer engagement costs driven by increased Card Member spending and usage of travel-related benefits,' meaning that the bells and whistles that come with the premium cards are so enticing they're chipping away at Amex's margin somewhat. Still, the card issuer reaffirmed its outlook 8%–10% revenue growth and full-year earnings per share of $15-$15.50. On the conference call with analysts after the release of its earnings, company management dug into this dynamic, with momentum especially strong among millennials and Gen Z who are embracing the brand's luxury value proposition. They want what the premium cards offer, in other words. Despite strong earnings, the share price, which hit a record high earlier in the month, fell 2.6% in afternoon trading. Truist Securities analyst Brian Foran commented in a research note that 'some investors have moved to a 'being good is not good enough' mindset.' It also suggests that all the perks that come with these premium cards may be attractive for members, but the rising cost of servicing them has the Street worried about how much Amex is betting on its affluent customer base. Trends in generational wealth Millennial spending rose 10%, while Gen Z cardholders grew their spend at a somewhat astonishing 40% (albeit from a smaller base). This generational shift bodes well for the premium space: not only older, established wealth but younger, upwardly mobile clients are embracing the brand's luxury value proposition. And these new members seem to be using their cards—a lot. Net card fees rocketed up 20% year-over-year (FX-adjusted), reinforcing that more users are opting into premium experiences. Card fee revenues have more than doubled since 2019, with recent refreshes on Gold, Delta, and Hilton cards spurring double-digit account growth and 98% retention. CFO Christophe Le Caillec said this validates the firms' strategy of 'first acquiring new customers onto fee-based products, then driving strong retention of our customer base, and finally, increasing value through product refreshes and pricing accordingly.' To this point, the company is preparing a significant refresh of its U.S. Consumer and Business Platinum Cards this fall—bolstering the luxury perks and rewards that millionaire millennials and aspiring Gen Zers crave. Also, the launch of the new Coinbase One Card on the Amex network adds a crypto-forward wrinkle, aimed at younger, high-earning professionals seeking digital assets. Amex is confident it has a 'long runway for growth' as the premium segment continues to expand. Credit performance 'best in class' Spending is robust, but so is the financial health of Amex's clientele. The company boasted the lowest projected credit card loss rate and the highest projected return on assets in the Federal Reserve's 2025 stress tests—a testament to the resilience and stability of its cardholders even in theoretical economic downturns. For the second quarter, Amex's net write-off rate inched lower to 2.0% (from 2.1% a year ago), meaning bad debts that are uncollectible. It also said overall credit performance remains 'best in class.' These are other ways of saying that the overwhelming majority of customers are not only spending—they're also reliably paying their bills. This goes for the younger card members, too. Lakayak noted on the call that the delinquency rates for U. S. millennial and Gen Z customers aren't just better than the industry average for those age groups, but they're also 'nearly 40% better than the industry average for older age groups.' Comments on the call also extended to the fact that the premium American Express card is offering too much of a good thing, as its airport lounges deal with access and overcrowding issues. There are just too many affluent cardholders who want the lounge experience before they fly. 'We're trying to make the lounges bigger,' CEO Steve Squeri said in response to a question from an analyst. He also said they have to get 'innovative' because the lounges are just so popular, citing a 'sidecar' arrangement they used in the Las Vegas airport, 'which is a more of a small kind of, I don't know, maybe call it a speakeasy kind of of lounge, where if you just want to go in for a quick drink or grab something quickly, you can do that.' The record revenue—and climbing expenses—indicate this will be popular for some time to come. A long runway, indeed. American Express declined to comment. Correction: This article was updated to correct the spelling, attributable to human error, of American Express' CFO last name, which is Le Caillec. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on
Travel Weekly
08-07-2025
- Business
- Travel Weekly
America Express to open Centurion Lounge at Amsterdam Schiphol
American Express plans to open a Centurion Lounge at Amsterdam Airport Schiphol in 2026. Located between concourses E and F, the lounge will feature Dutch-inspired designs, local art and food and beverages inspired by its location. The lounge is planned to be nearly 6,000 square feet and will feature a coffee bar, a nod to the importance of coffee to Dutch culture. It will also offer a bar, workstations, outlets and USB ports, several seating areas and WiFi. "With a large number of American Express Card Members traveling through Schiphol each year, the new Centurion Lounge will be an important addition to our growing global Centurion Lounge Network," American Express Travel president Audrey Hendley said in a release. "We know travelers are looking for authentic, local experiences when they travel, and the new Centurion Lounge will deliver a premium experience and amenities with a taste of Dutch history and culture."
Globe and Mail
20-06-2025
- Business
- Globe and Mail
Should You Buy AmEx Stock After Wall Street Ups Earnings View?
American Express Company AXP is gaining attention as its earnings estimates for 2025 have moved higher over the past week. The company delivered strong first-quarter 2025 earnings, driven by growing Card Member spending and a premium customer base. Rising revolving loan balances and continued robust card fee growth aided its performance. The results were partially offset by escalating customer engagement and operating costs. Analysts Turn Bullish on AmEx Wall Street analysts are turning bullish on the stock, as evident from the earnings estimates' northward revision. Over the past seven days, the Zacks Consensus Estimate for 2025 earnings has increased 1 cent. The Zacks Consensus Estimate for AmEx's 2025 and 2026 earnings indicates 13.9% year-over-year growth each. Similarly, the consensus mark for 2025 and 2026 revenues is pegged at $71.3 billion and $77 billion, respectively, indicating 8.1% and 8% year-over-year growth. It beat earnings estimates in each of the past four quarters, with the average surprise being 5.2%. American Express Company Price and EPS Surprise AmEx's Tailwinds Analysts anticipate that American Express will soon announce a significant increase in the annual fee for its Platinum card, following rival JPMorgan Chase & Co. 's JPM decision to raise the fee on its Sapphire Reserve card by 45% to $795, a record hike among major U.S. credit cards. AmEx is expected to unveil its largest-ever card revamp this fall, marking a substantial investment in its premium offering. Warren Buffett frequently cites AmEx as a prime example of a durable business with a strong competitive moat. Unlike Visa Inc. V and Mastercard Incorporated MA, which operate solely as payment networks, AmEx also functions as a bank, allowing it to generate revenue from both transaction fees and interest on card balances. This integrated model provides a more diversified income stream and enhances its resilience to economic uncertainty. The company is also making notable inroads with younger consumers. Gen X, millennials, and Gen Z now represent a significant share of AmEx's customer base, spending at higher levels than baby boomers and driving long-term growth prospects. Financially, AmEx remains on solid footing. As of the first quarter of 2025, it held $52.5 billion in cash and equivalents against just $1.6 billion in short-term debt. The company returned $7.9 billion to shareholders in 2024 through dividends and buybacks and maintained that momentum in early 2025 with $1.3 billion returned in the first quarter. Additionally, it boosted its quarterly dividend by 17% in March 2025 to 82 cents per share. AmEx's Price Performance & Valuation AmEx stock has gained 9.6% over the past three months, underperforming the industry 's 6.3% decline. Peers like Visaand Mastercardalso witnessed growth, but to a lesser extent. Meanwhile, the S&P 500 has gained 5.5% in the same period. Three-Month Price Performance Comparison – AXP, V, MA, Industry & S&P 500 AXP is currently trading at a premium based on its historical valuation. Its forward P/E ratio stands at 18.31X, above its five-year median of 16.83X, indicating a higher-than-usual market confidence in its growth prospects. However, when compared to peers such as Visa and Mastercard, which trade at forward P/E multiples of 27.53X and 31.27X, respectively, AXP appears relatively attractive. AmEx's Risks American Express continues to grapple with rising expenses, which could weigh on profit growth. Total costs have climbed steadily in recent years, up 22% in 2021, 24% in 2022, 10% in 2023 and 6% in 2024. The trend persisted into the first quarter of 2025, with expenses rising 10% year over year to $12.5 billion. A large portion of these costs stems from customer engagement and marketing efforts, which are expected to remain elevated, putting pressure on margins. Reward expenses and cardmember services remain key cost drivers, comprising nearly 45% of total expenses in 2024. These categories are set to rise further as consumer spending grows. Membership Rewards and cashback payouts have increased in line with higher billed business, while surging travel-related expenditure has also contributed to the jump in rewards expenses. Should You Buy AXP Stock Now? American Express remains fundamentally strong, backed by a premium customer base, diversified revenue streams and a solid balance sheet. Its ability to capture younger demographics and the planned Platinum card revamp offer long-term growth potential. However, rising expenses, especially in rewards and customer engagement, pose margin risks, while the stock's premium valuation versus its historical average tempers near-term upside potential. Although analyst sentiment has improved slightly, with upward estimate revisions for 2025, these positive factors appear largely priced in. Given this balanced risk-reward profile, a Zacks Rank #3 (Hold) seems appropriate, suggesting investors wait for a more attractive entry point. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report
Independent Singapore
13-05-2025
- Business
- Independent Singapore
American Express cards will be accepted on public transport starting May 15
SINGAPORE: On Tuesday (May 13), the Land Transport Authority (LTA) and American Express issued a joint news release announcing that commuters on public transport may begin using their American Express cards for contactless payments beginning this Thursday (May 15). 'This will provide greater convenience and choice for public transport commuters,' the news release reads. This development will benefit not only locals but tourists as well, since payment systems will accept cards issued by American Express and cards issued by its partner banks in Singapore and other countries. Additionally, commuters may add their American Express cards to their mobile wallets. They do not need to pre-register their cards for public transport rides. This means that they won't need to bring or take a travel card when getting around Singapore or top up stored-value travel cards before going out. 'We are proud to partner with the LTA to bring more contactless payment options to Singapore commuters as this form of payment becomes increasingly popular. For our local and overseas Card Members, including those of our third-party partners, this brings greater convenience as they can now tap, pay, and ride across the ever-expanding bus and train network in Singapore. 'It is important for us to provide our Card Members a seamless payment experience wherever they live, work, and play, and enabling them to use their cards on public transportation worldwide is essential,' said Marlin Brown, American Express Country Manager for Singapore. The LTA added that commuters using American Express will be charged the same fares as those using stored-value travel cards, such as EZ-Link and NETS FlashPay cards. They will also not need to pay any additional fees. Similar to retail transactions, the charges for public transport rides will be seen in the commuter's credit, charge, debit, or prepaid card bills. As for commuters with a SimplyGo app account, they will be able to use the SimplyGo mobile app to check their travel expenses and history. They will also be given the option to receive push notifications for fares incurred after each trip. 'Commuters who carry more than one contactless bank card or travel card are reminded to take out the card they wish to use before tapping at the fare reader, and to use the same card to tap in and out, to avoid charges to multiple cards,' the joint statement added. /TISG Read also: Here's Why You Should Start Considering An American Express (AMEX) Credit Card
Malay Mail
13-05-2025
- Business
- Malay Mail
Public Transport Commuters can use American Express Contactless Cards for Transit Payment from 15 May 2025
[1] Eligible American Express cards include those issued by American Express and its third-party partners worldwide. SINGAPORE - Media OutReach Newswire - 13 May 2025 - From 15 May 2025, commuters will be able to use their American Expresscards to make contactless payments for public transport fares. This will provide greater convenience and choice for public transport Marlin Brown, American Express Country Manager for Singapore said: "We are proud to partner with the Land Transport Authority (LTA) to bring more contactless payment options to Singapore commuters as this form of payment becomes increasingly popular. For our local and overseas Card Members, including those of our third party partners, this brings greater convenience as they can now tap, pay and ride across the ever-expanding bus and train network in Singapore. It is important for us to provide our Card Members a seamless payment experience wherever they live, work and play and enabling them to use their cards on public transportation worldwide is essential."Commuters can also add the cards to their mobile wallets and need not pre-register their cards for public transport rides. This will eliminate the need to carry a separate travel card or top up stored value travel cards before the who use American Express cards are charged the same fares as those who use stored value travel cards (i.e. EZ-Link and NETS FlashPay cards), with no additional fees involved. Charges for public transport rides are reflected in the commuter's credit, charge, debit or prepaid card bills, similar to retail transactions. Commuters with a SimplyGo app account can also view their travel expenses and history on the SimplyGo mobile app, along with an option to receive push notifications for fares incurred after each trip. Commuters who carry more than one contactless bank card or travel card are reminded to take out the card they wish to use before tapping at the fare reader, and to use the same card to tap in and out, to avoid charges to multiple #AmericanExpress The issuer is solely responsible for the content of this announcement.
