MW Amex customers have been spending big on first-class and business-class seats

By Emily Bary

While American Express cardholders spent 8% more in the fourth quarter, they spent 13% more on flights

A previous version of this report contained an incorrect characterization of the portion of Amex's U.S. Platinum and Gold Card acquisitions that come from younger generations.

American Express Co. saw an acceleration in spending growth by its card members during the fourth quarter, as travel and entertainment were particularly hot categories.

Amex's $(AXP)$ fourth-quarter spending growth of 8% compares with 6% in the prior quarter. And the company saw even faster growth in airline spending, which was up 13%. Spending on front-of-cabin plane tickets, which includes business and first class, was up 19%, according to Chief Financial Officer Christophe Le Caillec.

He told MarketWatch that January spending growth was trending in the 8% range as well.

Amex continued to see traction with younger customers last quarter, as spending by Millennials and Gen Z rose 16%. About 75% of new U.S. Platinum and Gold Card acquisitions for Amex come from those cohorts, Le Caillec said.

The company, which will celebrate its 175th anniversary this March, has shifted its rewards program "from purely travel and entertainment for middle-aged frequent fliers" to include things such as streaming benefits that resonate with a younger crowd, according to Le Caillec.

See also: Is this heavy-hitting American Express card worth the $695 fee? Yes, if you're in this group.

Amex on Friday also gave an upbeat view of its revenue prospects for the year, as the card company expects to see 8% to 10% revenue growth for 2025. Analysts tracked by FactSet anticipated $71.3 billion in revenue, translating to 8.1% growth.

With its profit forecast for 2025, American Express $(AXP.AU)$ is targeting $15 to $15.50 in earnings per share. That brackets the consensus view, which was for $15.24.

Read: Why Visa's stock could be a better play than Mastercard's this year

The company matched revenue expectations for the fourth quarter, hauling in $17.2 billion, driven by the increased spending, "accelerated card-fee growth" and greater net interest income.

Amex saw $1.3 billion in consolidated provisions for credit losses, which compares with $1.4 billion a year prior. The company said it conducted a lower net reserve built relative to a year before, though it also saw higher write-offs even as its net write-off rate fell to 1.9% from 2.0%.

Earnings per share of $3.04 for the fourth quarter cleared Wall Street's bar of $3.03, based on the FactSet consensus view.

Amex plans to boost its dividend by 17% to 82 cents a share.

-Emily Bary

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February 07, 2025 09:29 ET (14:29 GMT)

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