American Express Raises Profit Forecast Amid Strong Demand from Affluent Customers

American Express (AmEx) has raised its full-year profit forecast, buoyed by continued spending from its wealthy clientele on travel, dining, and entertainment. The company reported a better-than-expected second-quarter profit, highlighting the advantages of its focus on a premium customer base. CEO Stephen Squeri noted that the company’s affluent cardholders have provided a buffer against broader economic weaknesses, even as competitors face declining demand due to high borrowing costs. For 2024, AmEx now projects earnings per share between $13.30 and $13.80, an increase from its previous estimate of $12.65 to $13.15. In the second quarter ending June 30, the company reported a profit of $3.02 billion, or $4.15 per share, marking a 39% increase from the previous year. Excluding a one-time gain from the sale of its fraud prevention technology unit, earnings per share reached $3.49, surpassing analysts' expectations of $3.24. Revenue for the quarter rose 9% to a record $16.33 billion, although it fell short of the anticipated $16.59 billion. Following the earnings report, shares of the New York-based company dipped 2% in premarket trading. Additionally, AmEx recently announced its acquisition of restaurant-booking platform Tock from Squarespace, aiming to strengthen its presence in the dining sector and tap into the small-and-medium-enterprise market, which analysts consider a promising area despite recent spending slowdowns.