During its second-quarter earnings call, American Express CEO, Stephen Squeri, revealed that spending showed double-digit growth both from U.S. consumers and card members abroad.
The remarkable surge in spending through its card products during the latest quarter is largely driven by the resurgent demand for travel and entertainment experiences.
The Robust Travel and Entertainment Demand
Squeri highlighted the robustness of the U.S. consumer market, where individuals display a strong willingness to travel despite lingering concerns about a possible recession.
Squeri said: “Travel and Entertainment spending remained strong across customer categories and geographies, growing 14% on an FX-adjusted basis. We also saw reservations on our Resy restaurant platform reach a quarterly high and bookings through our consumer travel business reach their highest levels since before the pandemic.”
Forward Travel Bookings on the Rise
One of the most encouraging signs that emerged during the earnings call was the undeniable strength of forward travel bookings. Forward travel bookings are surpassing the figures from the same period in 2022 and even outpacing pre-pandemic levels in 2019. This newfound enthusiasm for travel bodes well for American Express and the broader travel industry.
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Resilient U.S. Consumer Sentiment
Stephen Squeri credited the robust spending figures to the unwavering optimism of the U.S. consumer. Despite the persistent risks associated with a potential recession, American consumers have displayed remarkable resilience and a strong willingness to travel. This enduring optimism has been a driving force behind the surge in spending.
A Flourishing Customer Segment
American Express has been witnessing robust demand for its premium products, attracting 70% of new accounts. Interestingly, the Millennial and Gen Z consumer segments have emerged as the fastest-growing, constituting 60% of new consumer accounts for the quarter. Notably, spending by young U.S. consumers surged by 21%.
A Record-Breaking Quarter
American Express is reaping the benefits with record-breaking spending figures. The company’s performance reflects not only the enthusiasm for travel but also the confidence of consumers in its card products and services, making it an essential player in the evolving financial landscape.
The company’s second-quarter net income reached $2.17 billion, equivalent to $2.89 per share, compared to $1.96 billion, or $2.57 per share, in the previous quarter.
Conclusion
American Express’ record-breaking quarter highlights the enduring allure of travel and entertainment experiences, fueled by the unwavering optimism of the U.S. consumer.
