American Express Company (AXP) reported first-quarter earnings that exceeded analyst expectations, driven by robust spending from its affluent cardholder base. However, shares declined as the company maintained its full-year guidance and highlighted emerging headwinds in travel-related expenditures.
For the quarter ended March 31, 2026, the New York-based credit card giant posted net income of $2.97 billion, or $4.28 per diluted share, surpassing the $4.02 per share consensus estimate from LSEG. This compares with net income of $2.58 billion, or $3.64 per share, in the same period last year, representing a 15% year-over-year increase.
Revenue net of interest expense climbed 11% to $18.91 billion, while billed business—the total value of transactions processed on AmEx cards—reached $428 billion. Cardmember spending, adjusted for foreign exchange fluctuations, rose 9%, marking the fastest growth rate in three years. The strong spending was broad-based, with retail spending up 11% and luxury retail surging 18%, according to Chief Financial Officer Christophe Le Caillec.
Despite the earnings beat, American Express shares fell 4.3% in after-hours trading to $318.55, as investors focused on the company's decision to leave its 2026 revenue and profit outlook unchanged. The company continues to target revenue growth of 9% to 10% and earnings per share in the range of $17.30 to $17.90 for the full year. Additionally, management noted some softness in travel spending late in the quarter, with an uptick in refund requests linked to escalating geopolitical tensions in the Middle East. Nonetheless, airline spending still managed an 8% increase for the quarter.
Credit quality remained solid, providing a buffer against rising costs. Provisions for credit losses increased to $1.25 billion from $1.15 billion a year ago, but the net write-off rate on consumer and small-business loans edged down to 2.0% from 2.1%. Delinquencies of 30 days or more held steady at 1.3%. Chief Executive Stephen J. Squeri described credit performance as “excellent” and said the company sees “no noise or concerns” in credit trends.
Expenses rose 11% to $13.9 billion, driven by higher spending on rewards, travel and lifestyle perks, and operational costs. The company is also increasing investments in marketing and technology, including new AI-powered shopping tools, to attract and retain cardmembers. Squeri also committed to backing cardholders on eligible purchases made through AI agents, signaling a proactive stance on emerging consumer protection issues.
Revenue composition shifted, with net card fees jumping 18% to $2.75 billion, discount revenue—the fees AmEx collects from merchants—rising 9% to $9.51 billion, and net interest income adding 13% to $4.69 billion. The results underscore the resilience of high-income American consumers, even as interest rates, inflation, and fuel prices persist.
Looking ahead, the key question for American Express is whether elevated spending levels can continue to offset the costs of richer rewards and ongoing travel disruptions, especially as the market had hoped for an upgraded outlook. With the company sticking to its existing guidance, investors will be watching closely for signs of sustained momentum in the coming quarters.
