American Express Soars: A Financial Win Spurred by Affluent Spending

On Friday, American Express surpassed second-quarter profit expectations, bolstered by continued robust spending from affluent cardholders.

This performance highlights the credit card giant's strategic emphasis on wealthier customers, effectively shielding it from the declining consumer confidence prevalent among lower-income households. Although not reflective of the broader economy, AmEx's strong figures illustrate evolving trends in travel and discretionary spending, particularly among creditworthy borrowers.

AmEx's earnings, excluding one-time items, reached $4.08 per share, beating the predicted $3.89 per share. Revenue increased by 9% to $17.9 billion, while credit loss provisions also climbed from $1.3 billion to $1.4 billion. Despite this, AmEx's shares have risen 6.3% year-to-date, slightly trailing the benchmark S&P 500's 7% increase. Meanwhile, competition in the premium credit card market intensifies, with Citigroup announcing the upcoming launch of its Citi Strata Elite card.

(With inputs from agencies.)