^{Source: Eye of the Flyer}

American Express (AmEx) has reported strong financial results for the first quarter of 2025, showcasing the resilience of its affluent customer base in the face of economic headwinds. The company's earnings per share (EPS) reached $3.64, surpassing analyst expectations of $3.47, while revenue climbed to $16.97 billion, exceeding forecasts of $16.94 billion .​

Key Financial Highlights

• Revenue Growth: AmEx's revenue increased by 7% year-over-year, reflecting sustained consumer spending.​
• Earnings Per Share: EPS rose to $3.64, beating analyst projections.​
• Net Interest Income: The company reported net interest income of $4.17 billion, slightly above expectations .​
• Credit Loss Provisions: Provisions for credit losses declined to $1.2 billion, indicating stable credit performance .​

Spending Trends by Demographics

AmEx's growth is significantly driven by younger consumers:​

• Millennials and Gen Z: These groups increased their spending by 16% year-over-year, accounting for a substantial portion of the company's billed business .​
• Gen X and Baby Boomers: Spending among Gen X rose by 5%, while Baby Boomers showed a modest 1% increase.​

The surge in spending among younger demographics underscores their growing economic influence and preference for premium financial products.​

Sector-Specific Spending Insights

AmEx observed varied spending patterns across different sectors:​

• Dining: Restaurant spending increased by 8%, highlighting consumer confidence in discretionary spending.​
• Air Travel: Spending in the airline category grew by 3%, a slowdown compared to previous quarters.​

These trends suggest that while consumers remain willing to spend on experiences, there is cautiousness in certain sectors, possibly due to economic uncertainties.​

Outlook and Strategic Positioning

Despite concerns over new tariffs and potential economic slowdowns, AmEx maintains a positive outlook:​

• Revenue Guidance: The company projects revenue growth of 8% to 10% for the year.​
• Earnings Forecast: Expected EPS ranges between $15.00 and $15.50, contingent on macroeconomic conditions .​

AmEx's focus on attracting and retaining high-quality customers, particularly among younger generations, positions it well to navigate potential economic challenges.​

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American Express's first-quarter performance demonstrates the company's resilience amid economic uncertainties. The continued spending by affluent and younger cardholders, coupled with strategic financial management, suggests that AmEx is well-equipped to handle potential challenges posed by new tariffs and broader economic shifts.​

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