American Express(AXP)2024-07-19 15:34Financial Data and Key Metrics Changes - Revenue for Q2 2024 reached an all-time high of 3 billion, resulting in earnings per share (EPS) of 0.66 from the sale of Accertify [15][16] - The company raised its full-year EPS guidance to a range of 13.80, up from 13.15 previously [8][28] Business Line Data and Key Metrics Changes - Billed business grew 6% year-over-year on an FX adjusted basis, with 6% growth in goods and services and 7% growth in travel and entertainment spending [16] - US consumer segment grew billings at 6%, with Millennials and Gen-Z spending increasing by 13% [17] - Commercial services saw overall growth of 2%, while international card services experienced a 13% increase [18] Market Data and Key Metrics Changes - The company reported stable spend growth across customer segments and categories, with strong growth in the number of transactions from card members, which grew 9% [16][18] - International spending growth remained robust, with double-digit growth across all regions [18] Company Strategy and Development Direction - The company plans to invest around 800 million compared to last year, funded entirely from core business results [8][24] - Ongoing product innovations and enhancements to the membership model are key strategies, with approximately 40 product refreshes planned by year-end [12][60] - The company aims to maintain strong engagement with premium customers and continue attracting high-quality card members [9][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve mid-teens EPS growth even in a slower growth environment [27] - The outlook for credit performance remains strong, with expectations for stable write-off rates and a disciplined growth strategy focused on high credit quality customers [20][50] Other Important Information - The company returned 1.8 billion in share repurchases, the highest level in over two years [26] - Operating expenses were down 13% year-over-year due to a gain from the sale of Accertify, with expectations for flat operating expenses for the year [24] Q&A Session Summary Question: Insights on US consumer and SMEs - Management noted a sequential decline in US consumer growth from 8% to 6%, influenced by Millennial and Gen-Z spending, which remains strong [31] Question: Revenue guidance for 2024 - Management reiterated the revenue guidance of 9% to 11%, indicating comfort within that range based on current performance [34] Question: Product refresh impact - Management highlighted that product refreshes enhance marketing effectiveness and provide more value to cardholders, contributing to future growth [38] Question: Marketing spend rationale - The increase in marketing spend is driven by identified opportunities rather than a response to competitor pullbacks, with a focus on acquiring more cardholders [42] Question: Credit quality outlook - Management expressed confidence in stable credit write-off rates for the remainder of the year, supported by strong customer health [50] Question: EPS guidance implications - Management clarified that the one-time gain from Accertify will not be included in future guidance, maintaining expectations for mid-teens EPS growth [52] Question: Digital banking investments - The company is focused on enhancing digital banking capabilities to engage more effectively with small businesses and consumers [55] Question: Product refreshes and net card fees - Management is optimistic about net card fee growth, supported by ongoing product refreshes and strong retention rates [59]