American Express AXP-N raised the lower end of its 2025 profit and revenue forecasts on Friday, as its affluent customers looked past economic uncertainty and continued spending ahead of the holiday season.
Analysts expect Amex to benefit from spending by high-income customers, particularly on travel and luxury purchases, during Christmas, Black Friday and Cyber Monday holidays as retailers lure them with discounts.
Its focus on premium cardholders could help the credit card company navigate economic uncertainty while capturing a bigger share of consumer payments through the end of the year.
Amex now expects earnings per share between US$15.20 and US$15.50 for the year ended December 31, compared with its prior expectations of US$15 to US$15.50. Revenue in 2025 is expected to grow between 9 per cent and 10 per cent compared with prior forecast of 8 per cent to 10 per cent.
Higher-income consumers are yet to cut back on spending, with most still planning holidays, buying big-ticket discretionary items, shielding Amex from the broader slowdown in the payments sector.
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Amex hasn’t seen any sign of pullback in spending, CFO Christophe Le Caillec said. “Retail spend, which is the biggest category of spend we have, it’s actually growing at a base of 12 per cent,” he said in an interview to Reuters.
Amex’s quarterly revenue jumped 11 per cent to a record US$18.4 billion in the third quarter. It posted profit of US$4.14 per share, compared with expectations of US$4, according to estimates compiled by LSEG.
While some credit risks are emerging among lower-income borrowers, there is broad consensus among the nation’s largest lenders that the U.S. consumer remains unexpectedly resilient.
Amex is less exposed to stress, as its business remains focused on cardholders with the highest FICO scores, reflecting minimal credit risk.
Consolidated provisions for credit losses stood at US$1.3-billion in the quarter, compared with US$1.4-billion a year ago.