Wealthy American Express cardholders became comfortable spending more freely again late last year, Chief Financial Officer Christophe Le Caillec told CNBC.
Spending on AMEX cards increased 8% year over year in the fourth quarter after slowing a growth rate from 7% at the beginning of the year to 6% during the second and third quarters, according to the company’s earnings presentation.
While year-end pickup was seen across all customer segments and geographies, it was especially fueled by Millennials and Gen Z users, where transaction volumes increased 16%, up from 12% in the third trimester.
The older groups were more restricted with their cards. Gen X customers spent 7% more in the fourth quarter, while Baby Boomers saw Billings increase just 4%.
“We had very strong growth of Generation Z and millennials, and that 2 percentage point acceleration gives us a lot of optimism for 2025,” Le Caillec said.
Elevated transaction levels have continued in the first three weeks of this year, he added.
Younger Americans are said to spend more on experiences rather than goods, and that’s reflected in the results of AMEX, which along with rival card issuer JPMorgan Chase, dominate the high-end credit card market.
Travel and entertainment billings rose 11% in the quarter, compared to 8% for goods and services. The boost in travel came from airline spending, which increased 13%, with spending on business class and first-class airfares, according to Le Caillec.
AMEX shares fell more than 2% in midday trading on Friday after the company reported earnings and revenue that were roughly in line with analysts’ expectations. Shares of the New York-based company have been on a tear over the past year, hitting a 52-week high on Thursday.
“We are encouraged to accelerate bill growth as we believe it will be a key driver for AMEX to meet its aspirational target of at least 10% revenue growth,” William Blair analysts led by Cristopher Kennedy wrote Friday in a research note. “We remain buyers on any pullback.”
