American Express Co. delivered a stronger-than-expected first quarter, underscoring the durability of high-income consumer spending even as broader economic signals remain mixed. The company’s results were driven by continued momentum among its premium cardholders, whose travel, dining, and luxury purchases pushed both revenue and profit above Wall Street forecasts.
The New York–based payments giant reported earnings per share of $4.28, an 18% increase from $3.64 a year earlier and well above analyst expectations of $4.00. Revenue, net of interest expense, rose 11% year over year to $18.91 billion, surpassing the $18.61 billion consensus estimate. Net income climbed to $2.97 billion from $2.58 billion in the same period last year, reflecting both higher spending volumes and disciplined cost management.
Chief Financial Officer Christophe Le Caillec pointed to a sharp increase in discretionary spending, particularly at the high end of the market. “We saw luxury retail spending increase 18% in the quarter, with overall retail up 11%,” Le Caillec said, highlighting the continued strength of affluent consumers even as inflation and interest rates weigh more heavily on lower-income households. Total billed business — a key measure of cardmember spending — rose 10% to $428 billion, reinforcing the company’s position as a leading indicator of premium consumption trends.
Chief Executive Officer Stephen Squeri emphasized that spending growth reached its strongest quarterly level in three years, driven by both long-standing customers and a growing base of younger, high-earning users. “We are seeing sustained demand across our customer base, including strong engagement from Millennials and Gen Z,” Squeri said, noting that younger cohorts are increasingly adopting premium cards earlier in their financial lives — a shift that could support long-term growth.
Despite the robust performance, shares edged lower following the release, as investors focused on the company’s decision to reaffirm — rather than raise — its full-year outlook. American Express maintained its 2026 earnings guidance of $17.30 to $17.90 per share and projected revenue growth of 9% to 10%, signaling confidence in its trajectory but offering no near-term upside surprise for markets already pricing in strong execution.
Management indicated that the outperformance in the first quarter has given the company flexibility to reinvest in future growth. Executives said they are lowering internal return-on-investment thresholds to fund expanded spending on marketing, customer acquisition, and technology — initiatives that had previously been deferred. The strategy reflects a calculated decision to prioritize long-term expansion over short-term margin optimization.
Capital returns remained a key component of the company’s financial strategy. American Express returned $2.3 billion to shareholders during the quarter through dividends and share repurchases, while maintaining a Common Equity Tier 1 (CET1) capital ratio of 10.5%, comfortably above regulatory requirements. The balance sheet strength provides additional capacity for continued investment while supporting shareholder distributions.
Looking ahead, the central question for investors is whether the resilience of affluent consumers can continue to offset broader economic headwinds. American Express’s results suggest that, for now, high-income spending remains a stabilizing force in the U.S. economy. But with interest rates still elevated and geopolitical risks lingering, markets will be closely watching whether that strength holds through the remainder of the year.
JBizNews Desk- Markets
