American Express’s Chief Financial Officer reports increased spending at year-end. This increase has been attributed to free spending among millennials and Gen Zs. The company’s financial report, explained by CFO Christophe Le Caillec, indicated fragmentation in credit card usage.
In 2024 Q2 and Q3, American Express customers’ card spending dipped from 7% to 6%. However, the company saw AmEx card spending climb to 8% in the fourth quarter. In its presentation of the 2024 full-year earnings, American Express explained the demographics of its heavy spenders. It turns out millennials and Gen Z users top the chart.
The American Express CFO further explained that the data on customer spending indicates that the year-end spike in expenses cuts across all major categories.
The Prime Mover As American Express CFO Reports Increased Spending at Year-End
Assessing the data of completed transactions during the tail end of 2024 reveals some consumer trends. For example, in Q4, Gen Z and millennial users of American Express services increased their spending. For more perspective, transactions by those two generations jumped from 12% in Q3 to 16% in Q4.
In contrast, Gen X customers’ spending increased by 7% in Q4, and boomers’ spending increased by 4%. The data presented during the American Express year-end presentation also revealed that many of customers’ Q4 expenses were for experiences, like leisurely travel and entertainment. CFO Le Caillec believes that Gen Z and millennial customers are the greatest drivers of business growth.
The American Express financial team is very optimistic that the surge in credit card usage and retail sales in Q4 2024 will spill over into the new year. Credit card products offered by financial institutions like JPMorgan Chase and American Express are seeing more spending on experiences than goods.
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American Express’s 2024 financial report spiked goods, services, entertainment, and travel transactions. However, payments for experiences far outpaced those for tangible commodities. Airlines must have had a full day in Q4 2024, as 13% more people traveled with them. Similarly, Le Caillec revealed that 19% more people booked first-class or business-class tickets relative to Q3 bookings.
How American Express Shares Has Fared So Far
It’s been a bitter-sweet mix for AmEx shares so far in 2025. Last Friday, the New York-based company experienced a 2% devaluation of its equity. Analysts could not suggest a distinct cause of the decline in AmEx shares value because the equity has performed as predicted a while back.
Chief Analyst at William Blair predicts local economic growth for AmEx. In one of his notes, he said, “We are encouraged by accelerating billings growth, as we believe it will be a key factor in helping Amex meet its aspirational target of at least 10% revenue growth.”
Full Year 2024 Results by American Express
American Express CFO reports increased spending at year-end, leading to a year-on-year net increase in total annual revenue. The financial firm acknowledged that consumer trends in relation to credit card usage and revolving loan balances were responsible for their business growth in 2024. One of the economic indicators that the bank finished 2024 strong was a total net revenue of $65.9 billion. That figure is a 9% increase in the consolidated total revenues from 2023.
American Express reported a net income of $2.2 billion in 2024 Q4 alone, up from $1.9 billion in 2023. The company’s financial report credits travel expenses and similar experience expenses incurred by what it calls “strong Card Members” for the net income growth.
Of course, retail sales equally climbed in Q4 2024. However, from data and economic indicators, American Express could clearly tell the frontline of its revenue in that quarter.
American Express Plans Dividend Increase
Yes, American Express CFO reports increased spending at year-end, and the news gets juicier for shareholders. The company’s Q4 financial report revealed that AmEx shares will enjoy a 17% increase in quarterly dividend. That means a dividend increase from $0.70 to $0.82 per share will commence during the dividend disbursement in Q1 2025.
In a recent statement, American Express Chairman and CEO Stephen Squeri said the company will continue building on its strong precedents. We will continue building on our growth and innovation history by investing in our premium value propositions, coverage, marketing, technology, and talent.”
Squeri is equally confident that American Express will maintain its strong business growth streak in the current fiscal year.
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With the foregoing, it is no longer surprising that the American Express CFO reports increased spending at year-end. When consumers are satisfied with a product or service, they naturally part with money to enjoy what it offers.