American Express CFO Reports Surge in Spending Driven by Millennials and Gen Z

American Express

Prime Highlights: 

American Express reported an 8% year-over-year increase in spending during Q4, following slower growth in earlier quarters. 

Millennials and Gen Z drove the surge in spending, with transaction volumes up 16%, compared to 12% in Q3. 

Younger cardholders focused more on experiences like travel and entertainment, contributing to an 11% rise in related spending. 

Airline spending rose by 13%, with business and first-class airfare increasing by 19%. 

Key Background: 

American Express saw a significant rebound in spending late last year, according to Chief Financial Officer Christophe Le Caillec. In an interview, Le Caillec revealed that affluent cardholders began spending more freely in the fourth quarter, contributing to an 8% year-over-year growth in spending. This marked an acceleration from earlier in the year, when spending growth had slowed to 6% during the second and third quarters. 

The uptick in spending was especially pronounced among younger consumers, particularly millennials and Gen Z. Transaction volumes from these groups surged by 16%, up from 12% in the third quarter. In contrast, spending growth was more modest among older generations, with Gen X customers increasing spending by 7% and Baby Boomers seeing a rise of just 4%. 

Le Caillec expressed optimism for 2025, attributing the strong growth in these younger demographics to a greater focus on experiences such as travel and entertainment. This trend was evident in the company’s earnings report, which showed an 11% increase in travel and entertainment spending, compared to an 8% rise in goods and services. Airline expenditures played a significant role, with a 13% overall increase, particularly in business and first-class flights, which rose by 19%. 

AmEx has become a dominant player in the high-end credit card market, alongside rivals like JPMorgan Chase. The company’s strong performance in the final quarter of 2024 has continued into the first weeks of 2025, further supporting the optimistic outlook for the year ahead. Despite the positive results, AmEx shares dropped more than 2% following the release of its earnings report, which met analysts’ expectations. However, analysts from William Blair remain confident in the company’s prospects, citing the accelerating growth in billings as a key factor for achieving its target of at least 10% revenue growth.