American Express (AXP, Financial) CFO Christophe Le Caillec noted that affluent cardholders have not shown signs of cutting back on spending, while younger customers have driven growth in transaction volumes. The company reported a 6% increase in billed business for the first quarter, with an adjusted growth rate of 7% accounting for the leap year effect. This suggests that the consumption momentum from late last year is continuing into 2025.
Despite concerns over potential economic impacts from President Trump's tariff policies, which led to a decline in U.S. stocks, these trends persisted in April. This contributed to earnings exceeding expectations for the quarter, indicating that the company may be insulated from tariff and inflation worries due to its affluent customer base.
Growth was particularly strong among younger cardholders, with Millennials and Gen Z members increasing their spending by 14%. In contrast, Gen X and Baby Boomer cardholders were more cautious, with spending rising by 5% and 1%, respectively.
Le Caillec mentioned that it's challenging to determine if cardholders are making advance purchases due to tariff concerns, as suggested by JPMorgan executives. However, he noted that some small businesses might be stockpiling in anticipation of cost increases. Restaurant spending, a key indicator of discretionary spending, grew by 8%, reflecting cardholder confidence and spending power.
