AmEx lifted its 2026 profit forecast but plans to cut 5% of its workforce to become more agile. Shares fell 2.5% as the company reported a $4.68 profit per share for the quarter ended September 30. CEO Stephen Squeri said the firm needed to be a more efficient organization.
Its shares were last down 2.5% in morning trading after CEO Stephen Squeri told analysts that the company had good momentum, but needed to become a more "agile and efficient" organization.
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Companies globally have stepped up job cuts in 2026, with several financial firms, including Barclays this week, citing efficiency gains driven by artificial intelligence and investments in the technology as reasons for the layoffs.
The company's consolidated expenses came in at $14.5 billion in the third quarter, up 9% over the prior year.
It expects full-year adjusted profit in the range of $17.60 to $17.90 per share, with the mid-point well above estimates of $17.63, according to data compiled by LSEG.
AFFLUENT SPENDING HOLDS UP
By targeting affluent consumers with high credit scores and more disposable income, the credit card giant has built a moat around its business to keep broader economic slowdowns and uncertainty at bay.
AmEx's travel and entertainment spending rose 10% in the third quarter from a year earlier, led by a 13% jump in the airline category and a 9% rise in the restaurant category.
"Of course, there is some impact here from the average ticket size and airline price increases," Chief Financial Officer Christophe Le Caillec told Reuters in an interview, referring to the airline segment.
Airlines worldwide have raised ticket prices in recent months as they grapple with surging fuel prices stemming from the Middle East conflict and disruptions to global oil flows.
Billed business, a measure of total spending on all AmEx-issued cards, rose 8% in the third quarter to $454 billion. Revenue climbed 9% to $20.1 billion.
"Spending is holding up at the top end and there's no sign of stress in this base, which stands in contrast to the lower-income consumer," said David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.
The company has invested heavily in attracting younger consumers, particularly Gen Z and millennials, as it seeks to build long-term customer relationships and expand its global market share to sustain growth.
AmEx posted an adjusted profit $4.68 per share in the quarter ended September 30, sailing past Wall Street expectations of about $4.48.
Reporting by Manya Saini and Arasu Kannagi Basil in Bengaluru; Editing by Devika Syamnath
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Manya covers the most influential U.S. financial institutions, from Wall Street’s largest banks and card networks to leading asset managers and fintech companies. She also reports on late-stage venture capital fundraises, initial public offerings on U.S. exchanges and regulatory developments shaping the cryptocurrency industry. Her work appears across the finance, markets, business and future of money sections of the Reuters website. She holds a bachelor’s degree in political science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.
Basil writes stories across the U.S. finance file including banks, asset managers, payment firms, insurers, and exchange operators. He also covers initial public offerings on U.S. exchanges and venture capital funding.