American Express, an American MNC that specializes in payment card services, reported that the company’s first-quarter profits dropped around 6% from a year earlier, but the company noticed an increase of 30% in spending on its namesake cards during the quarter as its customers holding American Express’s cards returned to their habits of travelling, shopping and dining.
The company is headquartered at 200 Vesey Street in Lower Manhattan’s Battery Park City neighbourhood of New York City, and it was founded in 1850.
The firm, which is based in New York, posted a profit of $2.1 billion, or $2.73 per share, down from $2.24 billion, or $2.74 a share, a year before. AmEx’s results last year received a one-time boost as the firm released part of its reserves set aside to cover potential losses during the epidemic.
Moreover, for months, travel and entertainment companies have stated that U.S. consumers are keen to get back to travelling after the two-year COVID-19 pandemic and gauging from American Express’s results; this seems to be true. The customers had spent $350 billion on their AmEx cards in the quarter, which is up by 30% from the year before. The average AmEx cardholder spent about $6,000 on their accounts in the previous quarter, up 27% from a year before.
AmEx said that spending on its cards reached an all-time high in March.
“Despite the uncertain economic environment, our outstanding first-quarter results demonstrated the continued business momentum we’ve built over the last several quarters,” AmEx CEO Steve Squeri said.
According to AmEx’s results, travel spending is still down from its 2019 levels but has mostly recovered from the pandemic. T&E spending is expected to go up in the second half of the year as more nations open their borders and people resume their pre-pandemic routines.
According to a local news website, AmEx also reaffirmed its full-year profit guidance, stating it expects to earn between $9.25 and $9.65 per share in 2022.