American Express Sees 6% Profit Jump as Wealthy Gen Z and Millennials Keep Spending

American Express is defying the broader economic anxiety gripping markets. The card giant just posted a 6% jump in quarterly profit, powered by the spending strength of its most loyal and most affluent users.

The company brought in $2.58 billion in profit for the quarter, or $3.64 per share, topping Wall Street estimates. Total revenue rose 8% to $17 billion, fueled by steady restaurant and hotel spending. While airlines saw a slight pullback, it wasn’t enough to dent momentum.

CEO Stephen Squeri says he’s not seeing signs of distress among the company’s core base: high-income cardholders, including Gen Z and millennials, who are increasingly driving new growth.

Younger, Wealthier, and Spending More

American Express added 3.4 million new cardholders this quarter. That in itself isn’t unusual. What’s surprising is that 60% of them were Gen Z and millennials. These younger users are spending more than any other generation, especially on lifestyle categories.

Gen Z and millennials increased their spending by 14% this quarter. Gen X trailed at 5%, with boomers barely moving the needle at 1%, according to company data shared on the earnings call.

Squeri credits the surge to Amex’s intentional pivot toward “lifestyle” offerings, perks tied to food, experiences, and travel rather than traditional finance rewards.

“Gold could have been renamed ‘the Restaurant Card’ between the rewards accelerator, the Resy credit, and the Global Dining collection,” he said.

The strategy seems to be working. Restaurant and lodging billings remained robust even as macroeconomic clouds gathered elsewhere. American Express’s acquisitions of reservation platforms Resy and Tock are starting to look more like prescient moves than expensive bets.

Wealthy Consumers Defy the Economic Mood

American Express’s niche-targeting model keeps delivering strong returns, and it’s far from a typical one.

As CFO Christophe Le Caillec told Barron’s, “our cardmembers are not representative of the full economy.” He emphasized that Amex clients have financial buffers to withstand volatility. While other financial firms are pulling or revising forecasts, American Express reaffirmed its guidance: 8% to 10% revenue growth, and $15 to $15.50 earnings per share.

That said, Le Caillec added a notable caveat on the earnings call that this forecast is “subject to the macroeconomic environment.” Given the less predictable path of the U.S. economy under a new administration and rising trade tensions, the company added the disclaimer explicitly this time.

Still, Le Caillec emphasized that spending trends in early April have been “consistent” with Q1 activity. CEO Stephen Squeri said in a statement that demand for premium products and experiences remains “strong across our customer base.”

Provisions for credit losses dropped slightly to $1.2 billion, down from $1.3 billion last year. That suggests affluent customers aren’t just spending, they are also staying solvent.

Credit Quality Holds as Rivals Struggle

While big banks are reporting rising net charge-off rates in their credit card divisions, American Express is holding the line.

Its net write-off rate stood at 2.1%, unchanged from a year ago. Delinquencies, bills unpaid for 30 days or more, were flat at 1.3%. According to Morgan Stanley, that compares favorably to the 4.33% average net charge-off rate reported by JPMorgan, Bank of America, Wells Fargo, and PNC this quarter.

American Express also reduced its provisions for credit losses to $1.2 billion from $1.3 billion. That’s not just a rounding error, it reflects confidence in the portfolio’s health.

As CEO Steve Squeri put it plainly: “I’m not seeing anything different or anything worrisome.”

Guidance Holds Steady Despite Uncertainty

Despite the strong quarter, American Express shares fell slightly in early trading. The stock is down 8% since early April, following new U.S. tariffs that rattled broader markets.

But some analysts see a disconnect. “We believe this discount is unwarranted, as American Express has posted faster revenue and earnings growth than the market,” William Blair noted in a research note. Amex trades at 16.6 times forward earnings, cheaper than the S&P 500 average.

Truist Securities echoed that sentiment. In a note, analysts wrote that investors feared guidance cuts due to softening consumer spending, but “a lot of the buyside was worried unnecessarily.”

As one of the few companies with a front-row view of elite consumer behavior, its earnings offer a lens into how the upper economic tiers are navigating 2025. And so far, the message is clear: they are doing just fine.

When asked by Barron’s about the economy or a possible recession hit, Le Caillec responded, “I don’t have an answer to that. I’m just like you. I’m just waiting to see what will happen.”