American Express Reports Earnings on July 24. Here's Why Card-Fee Growth Matters More Than Spending This Quarter.

American Express (NYSE: AXP) banal has been sliding this twelvemonth arsenic the marketplace continues to interest astir involvement rates, inflation, lipid prices, and however they're going to interaction the economy. The Warren Buffett favorite, though, continues to show maturation and momentum. Are the worries unfounded?

Here's wherefore card-fee maturation matters much than spending maturation close now, and what to expect erstwhile the institution reports second-quarter net connected July 24.

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The inflation-proof exemplary

American Express isn't the largest recognition paper web successful the world, but it targets the affluent, who thin to walk more. It has a fee-based exemplary for astir of its cards that attracts a higher-income population, and adjacent though it lone has 155.9 cardinal cards successful force, its gross is really overmuch higher than that of Visa (NYSE: V), which services astir 5 cardinal cards worldwide.

This exemplary works good and provides resilience successful challenging economical environments due to the fact that it has a recurring gross watercourse that flows straight to the bottommost line. Whether members store much oregon less, they inactive wage the yearly fee. There person been times erstwhile adjacent its higher spenders person been nether pressure, and the fee-based exemplary has provided extortion during those periods.

So far, concern has been robust contempt the challenging macroeconomy. In the 2026 archetypal quarter, gross accrued 11% twelvemonth implicit year, portion paper fees, which accounted for 14.5% of the total, accrued 18%. Billed concern was up 10%. Earnings per stock (EPS) were up 18% arsenic good to $4.28, and Wall Street is looking for $4.40 successful EPS for the 2nd quarter, a 7.8% summation twelvemonth implicit year.

The aboriginal maturation motor

Another diagnostic that plays into this is its palmy pivot targeting younger shoppers, who are buying into the semipermanent model. Millennials accounted for 30% of the full successful the archetypal 4th but accrued 13%, portion Gen-Z cardmembers accounted for 6% of the full but grew 38%. That's successful opposition with Gen-X members, who accounted for 36% and grew 8%. These shoppers should supply years of maturation arsenic they prosecute with the platform, wage yearly fees, and spend.

American Express, which is looking a batch much similar a subscription concern than a measurement play, tin navigate challenges much smoothly than a institution similar Visa, which simply takes a tiny chopped of each swipe. In Visa's case, less swipes mean little revenue. In Amex's case, much swipes sweeten the deal, but it's inactive coming retired ahead.