American Express Counts on Millennials to Power Spending Through 2026

Core Insights - American Express reported strong fourth-quarter performance, driven by retail, restaurants, and premium travel, with millennials and Gen Z now making up the largest share of U.S. consumer spending on its cards [1][4][3] Financial Performance - Fourth-quarter revenues increased by 10% to just under $19 billion, with total billed business rising 8% on a foreign-exchange adjusted basis [4] - Retail spending grew by 10%, luxury retail by 15%, and restaurant spending by 9%, with U.S. restaurant spending by U.S. consumer customers up more than 20% [4] - International markets contributed to growth, with spending up 12% FX-adjusted and transactions growing by 9% [5] Customer Demographics - The average age of new customers is 33 for the U.S. consumer Platinum card and 29 for the Gold card, indicating a long-term growth opportunity with younger customers [4] - Demand for premium products is reshaping the customer base, with younger card members carrying more spending weight [2][3] Business Segment Performance - Small business spending remained strong, while middle-market activity showed softness, consistent with broader industry trends [8][9] - American Express plans to expand digital tools and expense management capabilities for business customers, maintaining competitiveness in the small business and middle-market arena [9] Strategic Focus - The company is redirecting marketing efforts from lower-cost cash-back cards to fee-paying premium products, reflecting a multiyear strategy [5] - Travel bookings surged by 30% in the fourth quarter, attributed to the refresh of the Platinum card and increased cardholder engagement [7] Credit Performance - Delinquency and write-off rates remain below pre-pandemic levels, indicating strong portfolio quality [6] Future Outlook - American Express reaffirmed its revenue growth outlook for 2026, expecting growth of 9% to 10% [9]