American Express Beats Q2 Profit, Lifts Revenue Outlook on Strong Cardholder Spending

American Express on Friday raised its full-year revenue growth forecast and reported second-quarter profits that beat Wall Street expectations, signaling that its affluent customer base continues to spend robustly on travel and dining despite broader economic uncertainty.

The company's performance provides an early look at discretionary spending trends among high-income consumers, a demographic that has proven more resilient to persistent inflationary pressures.

Second-Quarter Highlights

American Express reported strong growth across key metrics for the three months ended June 30. The results reflect what CEO Stephen Squeri described as "stronger momentum than we expected" due to investments in the company's value propositions.

Key figures from the report include:

• Profit: $4.53 per share, surpassing the analyst consensus of $4.40 per share compiled by LSEG.
• Revenue: Rose 10% year-over-year to $19.6 billion.
• Billed Business: Total spending on AmEx cards increased 9% to $455.8 billion on a foreign exchange-adjusted basis.

"The investments we made in our value propositions have driven accelerated spend and revenue growth," Squeri said in a statement.

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Updated Forecast and Market Implications

Buoyed by the strong first-half performance, American Express now expects full-year revenue to grow by 10%, an increase from its previous guidance. This new forecast aligns with current Wall Street expectations, according to LSEG data. The company maintained its existing forecast for profit growth.

As a lender focused on premium customers, AmEx's results are often viewed by investors as a bellwether for the health of the high-end consumer. The sustained spending suggests this segment has largely weathered economic headwinds that have impacted other consumer groups.

Credit Quality Signals Confidence

In a sign of confidence in its borrowers' ability to manage their debts, the New York-based company reduced its provisions for credit losses. AmEx set aside $1.1 billion for potential defaults, a decrease from the $1.4 billion reserved in the same quarter a year ago.

These provisions, or "rainy-day reserves," offer a window into a lender's outlook on credit quality. The reduction indicates that American Express anticipates lower loan losses, even as U.S. households remain concerned about the high cost of living, according to recent consumer sentiment surveys.