By Mehnaz Yasmin and Niket Nishant
(Reuters) -American Express's first-quarter profit vaulted past estimates on Friday thanks to its affluent customers, and the company is looking to broaden its appeal among small businesses, the details for which are expected to be laid out at its investor day.
The credit card lender's high-income clientele has shielded it from a turbulent economic landscape that has troubled peers amid concerns over consumers' financial well-being.
"Over the years AmEx has narrowed its focus to the premium consumer and small and medium enterprises (SMEs), has expanded its network and remains keenly focused on improving its value proposition," William Blair analyst Cristopher Kennedy said.
The company has "several levers that support its aspirational top-line growth target," he said.
Consumer spending for AmEx in the United States climbed 8% from last year, while spending by SMEs was up 1%.
"You're seeing some softness in SME. As SME comes back, which we look (at) as an opportunity down the road, that will drive some stronger spending," CEO Stephen Squeri said.
AmEx maintained prior revenue growth expectations of 9% to 11% and a profit forecast of $12.65 to $13.15 a share for 2024.
Profit jumped 31% to $2.44 billion, or $3.33 a share, for the three months ended March 31, sailing past analysts' average expectation of $2.96 a share, according to LSEG data.
INVESTOR DAY EXPECTATIONS
CEO Squeri said AmEx will discuss its strategy for its premium consumer base and small business space in the U.S. at its investor day on April 30.
The company's revenue opportunity tied to its Gen Z and millennial customers will also be among the key topics of interest, William Blair's Kennedy said.
The credit card industry is gearing up for a seismic shift as Capital One Financial (NYSE:COF) works to complete its $35.3 billion acquisition of Discover Financial, which would create the biggest credit card issuer in the U.S.
But AmEx was not worried about any changes in the competitive landscape if the deal goes through, CFO Christophe Le Caillec said.
"We are going to be focused on executing our strategy and our plans because they are working well. It (the deal) is not going to change what we are doing," he added.
New York-based AmEx's shares rose 3.4%, to $224.86.