By Nicholas G. Miller
American Express said higher-income clients are spending on restaurants and luxury items, and that they continue to seek out its premium cards.
"We are encouraged by the strength and stability that we continue to see across our customer base," said Chief Executive Stephen Squeri in the company's fourth-quarter earnings call Friday. "We're really bullish from a consumer perspective."
The credit-card company said that in the fourth quarter restaurant spending rose 9%, while retail spending increased 10%. Spending at luxury merchants grew 15%, which reflects "the continued strength of our customer base," Squeri said.
In the call with analysts, Squeri also criticized President Trump's proposal to cap credit card rates at 10%. He said it would cause a "downward spiral" by reducing the number of cards and amount of credit available in the market. "America pretty much runs on credit. I think that would impact small businesses and so forth," Squeri said.
American Express goes after wealthier consumers who are willing to pay a premium fee for a credit card that offers access to perks and benefits.
Last year, the company unveiled its updated consumer and business Platinum cards with a higher annual fee. Demand for and engagement in the refreshed cards has exceeded expectations, and there has been no change in retention rates with the new fee, the company said.
"We saw a tremendous demand for premium products, particularly the Platinum card," Squeri said. "We saw a big uplift in Platinum over the holidays."
American Express said its premium products were becoming a larger share of its business and that they were providing much of its card-fee growth.
Still, the company said its overall number of cards declined from the third quarter to the fourth quarter as it reallocated marketing spending to focus on premium products.
Shares fell 2.8% to $348.35. The stock is up 9.2% over the past 12 months.
For the fourth quarter, the company reported net income of $2.46 billion, or $3.53 a share, up from $2.17 billion, or $3.04 a share, the year prior. Analysts polled by FactSet had expected $3.54 a share.
Revenue rose 10% to $18.98 billion, driven by higher card-member spending, card-fee growth and increased net interest income due to growth in revolving loan balances. Wall Street had expected $18.92 billion.
Card-member spending increased 9%, while net card-fee revenue grew by double digits.
The company's expenses rose 10% to $14.5 billion, largely due to higher variable customer-engagement costs from increased customer spending and the release of American Express's new Platinum cards.
The company guided for 2026 revenue growth of 9% to 10% and earnings of $17.30 to $17.90 a share. Analysts had seen 2026 earnings of $17.43 a share.
American Express also said it would increase its quarterly dividend by 16% to 95 cents a share, beginning for the first quarter.
Write to Nicholas G. Miller at nicholas.miller@wsj.com.
(END) Dow Jones Newswires
01-30-26 1112ET
