AmEx Lifts Revenue Outlook, but Spending Plans Rattle Investors

Affluent customers keep the engine running

American Express raised its full-year revenue growth forecast on Friday after strong spending by its affluent cardholders powered a second-quarter profit beat.reuters +1 Card spending climbed 9%, while net income increased 8% from a year earlier to $3.11 billion.qz +1

Diluted earnings reached $4.53 a share, above the $4.40 expected by analysts and up from $4.08 a year earlier.qz +1 Average spending per American Express customer increased to $6,759 from $6,393 in the year-earlier quarter.abcnews

A beat that still disappointed the market

The results were not enough to satisfy investors. American Express shares slid after revenue narrowly missed Wall Street’s expectation and management left its 2026 profit outlook unchanged.reuters +1 The reaction underscored a tension in the report: customers are spending more, but the company intends to recycle some of the upside into growth rather than let all of it flow through to near-term profit.

Expenses increased 12%, reflecting heavier marketing and the cost of refreshing card products as competition for premium customers intensifies.abcnews American Express also plans to direct more resources toward customer acquisition and technologies including artificial intelligence.abcnews

Premium growth comes with a higher price tag

The core franchise remained resilient. American Express added 3 million cards during the quarter, and three-quarters of new customers selected products carrying an annual fee.abcnews +1 Fewer delinquencies also helped earnings, a useful cushion as the company spends more to recruit and retain high-value customers.abcnews

That strength gives chief executive Stephen Squeri room to invest, particularly as American Express competes with JPMorgan Chase, Citigroup and Capital One for wealthy cardholders.abcnews Yet it also raises the bar for those investments. The upgraded revenue outlook signals healthy demand, while the unchanged profit range shows how expensive defending the premium-card position has become.reuters +1 Fee-bearing products deepen recurring revenue, but richer benefits also raise the cost of loyalty.