Millennials and Gen Z Consumers Boost Amex Card Spend in Q3

For American Express, as has been a longstanding trend, it’s the younger consumers, cards in hand, who are boosting results.

And, as Amex management noted on a Friday (Oct. 18) conference call with analysts, dining out is a prime example of where millennial and Gen Z consumers choose to wield those cards in full force.

The company’s earnings supplementals showed that consumer billed business — the metric that represents cardmember spending tied to transactions and card advances — was up 6% year over year (off recent peaks of 9% year-on-year growth seen in the third quarter of last year), as spending on goods and services spending matched that pace, as did spending on travel and entertainment.

Spending by millennials and Gen Z consumers — representing a third of the total spending — was up 12%, Amex noted, far outpacing the 6% growth seen with Gen X, and the flat spending tied to baby boomers.

Total loans and card receivables on the books stood at $202 billion in the third quarter, vs $193 billion a year ago, and up slightly from the second quarter’s $199 billion.

Shares of American Express were down by 1.3% in intraday trading on Friday, as overall revenues of $16.6 billion were slightly below expectations.

Dining Out Shows Continued Momentum

During the conference call with analysts, Amex CEO Stephen Squeri said the Gold card is proving especially popular with those younger consumers, as 80% of U.S. Gold Cards acquired by the firms are tied to this consumer cohort.

“We know that millennials and Gen-Zs are especially interested in dining,” Squeri said. “In fact, these younger card members transact almost two times more on dining and make up a higher percentage of users on our Resy restaurant booking platform than other generations in our card member base … spending on restaurants continues to be one of our fastest growing T&E categories in our US Consumer business.”

Spending at restaurants, said the CEO, was up 7% overall in Q3 versus last year and growing at nearly twice the industry rate overall since 2019. With a nod toward other dining-focused initiatives, Squeri noted that Resy has more than 50 million registered users, “and in the last 12 months alone, the platform has seeded over 350 million diners. We’re also embedding Resy benefits in several of our value propositions, including the US Gold Card,” he told analysts.

“Resy strengthens our membership model in other important ways. It connects our restaurant merchants with high spending premium customers while also providing them with state-of-the-art technology platform that helps them grow their businesses. Furthermore, Resy’s large user base gives us access to a pool of potential prospects who enjoy dining but do not yet have an American Express card,” Squeri said.

CFO Christophe Le Caillec said on the call that “while T&E growth rates are now more in-line with what we’re seeing on goods and services spending, the picture hasn’t changed very much since last quarter. Our customers continue to deepen their engagement with their American Express card as the number of transactions was up 9%” in the third quarter. Commercial services, said Le Caillec, was up modestly, as billed business here was up 1% year on year. International spending growth was notable, as 4 of the 5 top markets showed growth in the mid-teens percentage rates.

Loan growth, said the CFO, has been driven by “pay over time” options.

“Delinquency rates remain very low and in-line with our prior quarters, especially taking into account the seasonal downtick we saw in Q2 and write-off rates declined to 1.9% this quarter,” said Le Caillec, who added that “looking forward, I still expect modest upward bias to these rates, as we continue to acquire new customers at elevated levels and increase our share of lending from existing customers.”

Squeri remarked on the call, “our customer base is very different than our competitors’ customer base. And it’s really resilient and pretty stable. I think that they are continuing to spend, albeit at not levels that we saw coming out of the pandemic … we are not seeing anything that would indicate that spending would go down. And we are not seeing anything that would indicate our credit metrics are getting any worse.” The Amex earnings supplementals revealed that the percentage of cardmember loans and receivables 30+ days past due were 1.3% in the latest quarter, up from 1.2% in the second quarter of 2024 and from 1.2% a year ago — while the pre-pandemic rate was 1.5%.