American Express Stock Declines Despite Robust Financial Performance
American Express Co. experienced a notable stock price decline on Friday, with shares dropping 3.82% despite the company reporting substantial profit growth and increased spending among younger demographics. The financial services giant, headquartered in New York, released its fourth-quarter results for 2025, revealing mixed signals that left investors somewhat cautious.
Quarterly Financial Results Show Strong Growth
The company reported a quarterly profit of $2.46 billion, equivalent to $3.53 per share, for the period spanning October to December 2025. This represents a significant increase from the $2.17 billion, or $3.04 per share, recorded during the same timeframe in the previous year. The 13% profit growth demonstrates the company's continued financial strength and resilience in a challenging economic environment.
Despite this impressive growth, Wall Street analysts had anticipated slightly higher earnings-per-share figures, contributing to the stock's downward movement. Total expenses for the quarter climbed 10% year-over-year, reaching $14.5 billion, reflecting the company's ongoing investments in growth initiatives and customer engagement strategies.
Spending Patterns and Demographic Shifts
American Express cardmembers demonstrated robust spending activity during the quarter, with total expenditures reaching $506.2 billion. This marked an increase from $464 billion during the same period last year, translating to an average spend of $6,696 per cardholder. Credit card loan balances also grew substantially, reaching $213 billion compared to $199.1 billion in the previous year.
In a significant demographic shift, Chief Financial Officer Christophe Le Caillec revealed that Gen-Z and Millennial customers are now collectively outspending Gen-X, which has historically been the company's most significant spending demographic. This development highlights American Express's successful efforts to engage younger consumers through targeted offerings and digital experiences.
Strategic Investments and Premium Offerings
The company has maintained strong customer engagement through its premium perks and rewards programs. A strategic refresh of the Platinum Card in September introduced a $400 annual dining credit while simultaneously raising the annual membership fee to $895. This move reflects American Express's focus on enhancing value propositions for its affluent customer base.
During an analyst call, Chief Executive Officer Steve Squeri emphasized the company's investment philosophy, noting that American Express allocated $6.3 billion to marketing efforts last year. This represents an increase of approximately 75% since 2019, demonstrating the company's commitment to strengthening its competitive advantages across multiple areas.
"The key to driving our growth has been our investment philosophy," Squeri stated. "We consistently invest to strengthen our competitive advantages across key areas, including our customer value propositions, marketing, technology, partnerships and coverage."
Future Outlook and Strategic Developments
Looking ahead to 2026, American Express issued a forecast projecting earnings per share between $17.30 and $17.90. The company also announced plans to raise its quarterly dividend by 16%, increasing it from 82 cents to 95 cents per share, signaling confidence in its future financial performance.
In a strategic move that could reshape its corporate presence, American Express is reportedly nearing a deal to relocate its global headquarters to 2 World Trade Center. Such an agreement would provide the necessary anchor tenant for Silverstein Properties to begin construction on the long-delayed Manhattan supertall. Any final arrangement remains subject to approval by the Port Authority of New York & New Jersey, which owns the World Trade Center site.
Market Performance and Trading Details
At 12:59 p.m. EST on Friday, American Express shares were trading at $344.97, representing a decline of $13.68 or 3.82% from Thursday's closing price of $358.50. This market reaction occurred despite the company's strong fundamental performance, highlighting the complex factors influencing investor sentiment in today's financial markets.
The company's leadership remains optimistic about future prospects, with Squeri noting in a statement: "Our investments are paying off — driving increased customer demand, engagement and loyalty, while generating efficiencies across the enterprise and supporting our excellent credit performance."
