The company has enjoyed an impressive run since CEO Stephen Squeri took over in 2018 from longtime AmEx chief Ken Chenault.
Squeri has boosted AmEx’s investments in tech and diversified into other areas like small biz lending with last year’s acquisition of fintech startup Kabbage, a tech company aimed at small businesses. AmEx launched a new Kabbage checking account for that market last month.
“Our strong second-quarter results show that the steps we have taken to manage the company through the pandemic and our strategy of investing to rebuild our growth momentum are paying off,” Squeri said in the company’s earnings release.
“There is a lot of competition. There’s a lot of fintechs. There are banks out there,” Squeri said, noting that the banks in particular are “aggressive.”
AmEx doing a better job of reaching younger customers
Executives noted that AmEx has also done a better job of reaching younger consumers.
Chief financial officer Jeffrey Campbell said during the conference call that AmEx spent $1.3 billion on marketing expenses (which includes advertising) in the second quarter. The company plans to spend about $5 billion total on marketing this year, Campbell said.
For example, a new AmEx commercial this year shows a woman trying on jeans again after presumably wearing sweatpants while working from home for the past few months.
“We saw card member spending accelerate from the prior quarter and exceed pre-pandemic levels in June, with the largest portion of this spending growth coming from Millennial, Gen Z, and small business customers,” Squeri said in the press release.
During the conference call, Squeri said younger consumers are going out more and starting to take vacations again, which also is giving the company a boost.
“Travel and entertainment spending also accelerated in the quarter, particularly in the US, where a growing percentage of the population is now fully vaccinated,” he said.