With the economy bracing for a potential recession due to the trade war, American Express is plowing ahead with card refreshes and technology projects, saying it has room to adjust expenses if conditions warrant.
"We're not going to stop the refresh strategy," CEO Stephen Squeri said during Thursday's earnings call. "From an ROI perspective I don't think there would be a reason to do that."
Executives at publicly traded companies are conducting their first earnings reports since
Tech forward
Amex frequently refreshes, or updates, its cards and other products. That normally refers to card and site redesigns. More notably, it also often includes updates to financial incentives, loyalty and other perks, which could require a boost in customer acquisition and retention expense for Amex. The company, which has more than 30 product refreshes underway, did not change its product refreshes during past economic crises, Squeri said. "We haven't stopped refreshes even in the face of the [COVID-19] pandemic."
Product refreshes take months to execute, Squeri said, and are based on a long-term view of demand and customer health. "It's hard to stop them and we have confidence to put them out in the marketplace," Squeri said. Amex also does not plan to change or downsize its technology. The company has boosted
Amex plans to integrate Center's expense management technology with its corporate and small-business cards, building upon a small-business strategy that grew out of Amex's earlier acquisition of small-business payment company Kabbage. "We're not going to veer off of our technology plan. It doesn't make sense to start and stop our tech strategy," Squeri said.
Amex has expanded its ability to offer payments and other products to small businesses, which have suffered during the COVID-19 pandemic and the recent inflation wave. Squeri in the past has said Amex will
"What we won't do is just cut expenses to make an EPS number," he said.
Amex by the numbers
Boosted by spending from its high-end customer base, American Express reported strong results.
For the quarter ending March 31, Amex reported earnings per share of $3.63 on revenue of $16.97 billion. That beat Visible Alpha analysts' estimates of $3.47 and $16.93 billion. Net income was $4.17 billion, better than the $4.10 billion estimate.
In a release, Squeri said spending was consistent and in many cases better than what the company reported in 2024.
Amex affirmed its full-year outlook of 8% to 10% revenue growth and EPS of $15.00 to $15.50 "subject to the macroeconomic environment."
Investors are looking for signs that the tariffs and subsequent trade war are weakening the economy, and thus depressing payments. That impact is not expected to show up in the near-term but could cloud longer-term projections for the full-year 2025 or 2026.
For example, The U.S. card payments market is likely to grow 2.4% in 2025, totaling $10.8 trillion, according to a GlobalData report issued Tuesday. That would be lower than the growth rate of the previous two years, 5% in 2024 and 6% in 2023. GlobalData attributed the lower growth to tariff and trade uncertainty.
"Investors are focused on the uncertain macro environment," said analysts at William Blair in a research note, adding it reiterates its "Outperform" rating for Amex. "We believe American Express's focus on the premium consumer, tight underwriting standards and fee-based revenue model should enable it to navigate a potentially more difficult macro environment, and we believe the company has multiple levers to sustain strong double-digit EPS growth under a variety of revenue environments. ROE has averaged over 26% over the last 20 years," William Blair analysts said.
Amex's other recent moves include a
"We like AXP's solid medium-term growth prospects, strong competitive positioning, and high-return financial model, and we think its premium valuation suggests a balanced risk-to-reward profile," said HSBC in an analyst note, retaining its "Hold" rating for Amex.
