American Express Company (AXP) Barclays 22nd Annual Global Financial Services Conference (Transcript)

Core Insights - American Express is experiencing stable consumer spending in a slow-growth economy, with Q2 earnings reflecting a slight deceleration in growth rates from 8% in Q1 to 6% in Q2 [2][4][3] - The company is focused on maintaining strong engagement with its card members, evidenced by a 16% increase in card fees and strong credit metrics [4][3] - There is a notable growth in spending among younger generations, particularly millennials and Gen Z, with a reported growth rate of 13% in Q2 [6][7] Consumer Spending - U.S. Consumer Services saw network volumes grow by 8% in Q1, decelerating to 6% in Q2, with stability observed in Q3 [2][3] - Card members are highly engaged, with transaction growth outpacing billings, indicating strong product engagement [4][3] - Travel and entertainment (T&E) spending has moderated, but dining remains a strong category for engagement [6][4] Small and Medium Enterprises (SME) - The SME segment has shown organic spend softness, but there are signs of improvement in credit profiles and acquisition of new small businesses [10][11] - The company is actively working to enhance product offerings for SMEs to stimulate recovery in spending [11] Product Refresh and Card Acquisition - American Express has implemented around 40 product refreshes in 2024, with positive early performance noted for the Gold Card [12][13] - The company is focused on creating value through product enhancements, which has historically supported growth and customer re-engagement [15][14] Revenue and Earnings Guidance - The company has guided for 9% to 11% revenue growth for the year, with a year-to-date average of 10% [31][34] - Strong credit performance and effective expense management are contributing to mid-teens EPS growth expectations [34][37] Marketing Strategy - American Express plans to allocate $6 billion for marketing in 2024, a 15% increase year-over-year, focusing on personalized offers and customer acquisition [42][46] - The marketing budget is subject to profitability metrics, ensuring a disciplined approach to investment [44][47] Credit Performance - American Express has maintained strong credit metrics, outperforming industry peers, with a focus on premium card members driving this strength [56][57] - The company’s credit portfolio has shown resilience and lower volatility compared to the industry, as evidenced by stress tests [58][59]