AMERICAN EXPRESS CO AXP

The recent launch of the refreshed U.S. Consumer and Business Platinum cards has seen initial customer demand and engagement exceeding expectations. New account acquisitions are running at twice the pre-refresh level, with strong engagement in new benefits and over 500,000 requests for the new mirror card in the first three weeks. Retention rates have remained stable post-refresh, and record bookings were observed through Amex Travel following the launch, reinforcing the company's leadership in the premium segment.

American Express continues its proven strategy of regularly refreshing products to drive customer engagement and growth, with over 200 refreshes globally since 2019. This approach leverages the company's global premium customer base and merchant relationships, which have grown nearly fivefold since 2017. The strategy creates a virtuous cycle where enhanced offerings attract high-spending card members and world-class merchant partners, enabling reinvestment in product development and driving strong returns.

The company reported a very strong quarter with revenues up 11% year-over-year to a record $18.4 billion and earnings per share up 19% to $4.14. This broad-based growth across revenue lines was supported by annual card fees approaching $10 billion annually, having grown at double-digits for 29 consecutive quarters. The strong performance led to a raised full-year guidance for both revenue growth (9% to 10%) and EPS ($15.20 to $15.50).

Credit performance remains excellent and stable, with U.S. consumer and small business delinquency rates still below 2019 levels. Loan and card member receivables increased 7% year-over-year, largely in line with billed business. The focus on premium products attracts high-income, creditworthy customers, as evidenced by consumer applicants for the refreshed Platinum card having average FICO scores 15 points higher than before the refresh, contributing to double the acquisitions.

International markets continued their strong performance, with spend up 13% FX-adjusted and three of the top five countries growing by 18% or more. Millennials and Gen Z now constitute 36% of total spend, matching Gen X's share, and demonstrate higher engagement with an average of 25% more transactions per U.S. customer compared to older cohorts. This momentum underscores the success of widening the aperture for premium products to attract new generations.

Variable Card Member Engagement (VCE) expenses were up 14% in the quarter, with the VCE to revenue ratio at 42%, reflecting significant investments in premium value propositions, marketing, and technology. Despite these investments, the company returned $2.9 billion of capital to shareholders, including $0.6 billion in dividends and $2.3 billion in share repurchases, maintaining a robust Return on Equity (ROE) of 36%.