With the economy bracing for a potential recession due to the trade war, American Express is plowing ahead with card refreshes and technology projects, saying it has room to adjust expenses if conditions warrant. “We’re not going to stop the refresh strategy,” CEO Stephen Squeri said. “From an ROI perspective I don’t think there would be a reason to do that.” Product refreshes take months to execute, Squeri said, and are based on a long-term view of demand and customer health. “It’s hard to stop them and we have confidence to put them out in the marketplace,” Squeri said. Amex also does not plan to change or downsize its technology. The company has boosted investment in B2B technology, and this week closed on an acquisition of Center, an expense management company. Amex plans to integrate Center’s expense management technology with its corporate and small-business cards, building upon a small-business strategy that grew out of Amex’s earlier acquisition of small-business payment company Kabbage. “We’re not going to veer off of our technology plan. It doesn’t make sense to start and stop our tech strategy,” Squeri said. Amex has flexibility to adjust its marketing and operational expenses depending on economic conditions, Squeri said, adding it does not currently plan to lower those investments. “What we won’t do is just cut expenses to make an EPS number,” he said. Boosted by spending from its high-end customer base, American Express reported strong results.
For the quarter ending March 31, Amex reported earnings per share of $3.63 on revenue of $16.97 billion. That beat Visible Alpha analysts’ estimates of $3.47 and $16.93 billion. Net income was $4.17 billion, better than the $4.10 billion estimate. In a release, Squeri said spending was consistent and in many cases better than what the company reported in 2024. Amex affirmed its full-year outlook of 8% to 10% revenue growth and EPS of $15.00 to $15.50 “subject to the macroeconomic environment.” Investors are looking for signs that the tariffs and subsequent trade war are weakening the economy, and thus depressing payments. That impact is not expected to show up in the near-term but could cloud longer-term projections for the full-year 2025 or 2026. “Investors are focused on the uncertain macro environment,” said analysts at William Blair in a research note, adding it reiterates its “Outperform” rating for Amex. “We believe American Express’s focus on the premium consumer, tight underwriting standards and fee-based revenue model should enable it to navigate a potentially more difficult macro environment, and we believe the company has multiple levers to sustain strong double-digit EPS growth under a variety of revenue environments. ROE has averaged over 26% over the last 20 years,” William Blair analysts said. Amex’s other recent moves include a partnership with Alipay that will let consumers link their cards to Alipay’s digital wallet to make payments at tens of millions of merchants on the Chinese mainland. The collaboration makes it easier for Chinese merchants to accept payments from foreign travelers. Amex was one of the first U.S. payment companies to gain approval to process payments inside China, where regulatory hurdles have held back most American firms, even before the recent tariff spat. Amex additionally is attempting to acquire Apple Card’s payment processing from Mastercard. Amex is offering to be both the issuing bank and network processor for Apple.