Spending

AmEx profit beats estimates as travel and entertainment spending more than doubles

Credit card is seen in front of the American Express logo displayed in this illustration taken July 15, 2021. REUTERS/Dado Ruvic/Illustration/Files

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April 22 (Reuters) – American Express Co reaffirmed its full-year revenue and profit guidance on Friday after its first-quarter profit beat estimates as customer spending on travel and entertainment more than doubled to reach pre-pandemic levels.

U.S. consumer spending has been rising for months as Americans make up for lost time traveling, shopping and dining out following the easing of pandemic restrictions and as COVID-19 recedes from peak levels . Read more

The trend also fueled bullish spending forecasts from executives at major Wall Street banks, including JPMorgan Chase & Co (JPM.N), Wells Fargo (WFC.N) and Bank of America Corp (BAC.N). Read more

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Travel and entertainment spending rose 121% on a currency-adjusted basis from a year earlier and reached pre-pandemic levels globally for the first time in March, AmEx said.

Overall spending rose 35% globally on a currency-adjusted basis, with volumes hitting a monthly record in March as spending by Millennials and Gen-Z AmEx cardholders jumped 56%.

Shares of American Express, however, fell 1.2% before the bell as the company’s spending jumped 34% in the quarter due to increased customer engagement and service costs. remuneration.

Spending on goods and services, which is the largest payments category on AmEx, rose 21%, underscoring strong pent-up consumer demand.

The payments company expects strong momentum for the remainder of 2022 with annual net revenue growth of between 18% and 20% and earnings per share of $9.25 to $9.65.

AmEx reported net income of $2.1 billion, or $2.73 per share, for the quarter ended March 31, compared with $2.2 billion, or $2.74 per share, a year earlier . Analysts on average had expected earnings of $2.44 per share, according to data from Refinitiv IBES.

The New York-based company’s total revenue, excluding interest expense, rose 29% to around $11.74 billion.

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Reporting by Mehnaz Yasmin and Niket Nishant in Bengaluru; Editing by Vinay Dwivedi

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