(Reuters) -American Express exceeded estimates for second-quarter profit on Friday, fueled by resilient spending by its affluent cardholders.
The beat underscores how the credit card giant’s focus on wealthy customers has helped insulate it from the effects of waning consumer confidence, which is more pronounced among lower-income households.
While not representative of the broader economy, AmEx’s numbers offer valuable insight into evolving trends around travel and discretionary spending, especially among the most creditworthy borrowers.
Big banks said earlier this week that consumers remain in good financial shape despite high borrowing costs, trade policy uncertainty and a job market where companies are increasingly cautious about hiring.
Excluding one-time items, AmEx earned $4.08 per share for the three months ended June 30, compared with the $3.89 per share analysts were expecting.
Total revenue rose 9% to $17.9 billion.
Still, the New York-based company boosted its provisions for credit losses to $1.4 billion from $1.3 billion a year earlier.
Its shares jumped 2% before the open. They have gained 6.3% so far this year, compared with a 7% jump in the benchmark S&P 500 index <.SPX>.
Competition in the high-end credit card space is heating up. Citigroup said on Tuesday it will launch a new premium credit card, Citi Strata Elite, later this quarter to boost its appeal among affluent customers.
AmEx has also said it will roll out updates to its Platinum cards later this year for both consumers and businesses in the U.S., making its “largest investment ever in a card refresh”.
“We are confident in our ability to sustain our leadership in the premium space,” CEO Stephen Squeri said.
(Reporting by Niket Nishant in Bengaluru; Editing by Pooja Desai)
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