American Express (NYSE: AXP) reported a 13% increase in fourth-quarter profits, driven by surging spending among its affluent customer base. The company earned $2.46 billion, or $3.53 per share, compared to $2.17 billion, or $3.04 per share, in the same period a year earlier. This growth aligns with analysts' forecasts, according to FactSet.
Core Developments
American Express has shifted its marketing strategy to prioritize premium cards, particularly the Platinum card, which carries an $895 annual fee. The company has reduced investments in no-fee cash-back cards to focus on high-spending customers. This strategy has led to a 10% revenue growth in 2025, with net card fees rising 18% to a record $10 billion. The Platinum card refresh in September added benefits like a $400 annual dining credit, contributing to a 30% surge in travel bookings in the last three months of 2025.
Deeper Dive & Context
Spending Trends
Luxury spending was a key driver of growth, with purchases at luxury retailers up 15%, business and first-class airfare up 9%, and luxury hotel spending up 12%. Overall retail spending rose 10%, while general airline and lodging spending increased 3% and 5%, respectively. Restaurant spending saw a 9% increase, with a 20% rise at Resy partner venues, highlighting the success of Amex's partnership with the reservation platform.
Customer Demographics
For the first time, millennials and Gen Zers made up the largest share of U.S. consumer spending among Amex cardholders. The average new Platinum and Gold cardholders are 33 and 29 years old, respectively. This shift reflects Amex's successful targeting of younger consumers, who are driving demand for premium products.
Financial Performance
American Express reported $506.2 billion in card spending in the fourth quarter, up from $464 billion a year earlier, averaging $6,696 per card member. The company's credit card loans rose to $213 billion, up from $199.1 billion. Delinquency and write-off rates remain below 2019 levels, and the company returned $7.6 billion to shareholders while raising the quarterly dividend 16% to $0.95.
2026 Outlook
Amex forecasted earnings per share of $17.30 to $17.90 for 2026, with plans to increase the quarterly dividend to $0.95 per share. The company continues to invest in technology and cardmember value propositions to support long-term growth.