American Express Targets Millennials and Gen-Z with Gold Card Enhancements

2024-10-20

American Express recently conducted its Q3 2024 Earnings Call, where executives and analysts deliberated on the company's performance and strategies. The call, led by Kartik Ramachandran, the Head of Investor Relations, featured prominent figures like Chairman and CEO Steve Squeri, Christophe Le Caillec, Sanjay Sakhrani, and others.

During the call, it was revealed that American Express posted earnings per share of $3.49 and revenues of $16.6 billion in the third quarter, marking an 8% increase from the previous year. The company celebrated ten consecutive quarters of record revenues and adjusted its full-year EPS guidance to range between $13.75 and $14.05.

A focal point of the discussion was the U.S. Consumer Gold Card's significance in American Express's portfolio. The Gold Card stands out as a vital product, particularly attractive to Millennial and Gen-Z consumers, with 80% of acquisitions originating from this demographic. Enhancements to the dining benefits linked to the Gold Card were implemented to align with the dining preferences of these younger cardholders.

American Express has been broadening its dining capabilities through acquisitions such as Resy, Tock, and Rooam, underscoring the importance of dining within its membership model. The company's growth strategy in the hospitality sector centers on investing in value propositions and capabilities, with a strong focus on premium products propelling credit performance and revenue growth.

Despite challenges like a decline in organic spend for small businesses, American Express remains steadfast in its pursuit of acquiring new customers, particularly in the premium segment, to drive spending growth. The company's dedication to refreshing products, investing in marketing and technology, and upholding robust credit performance has bolstered its solid earnings foundation and growth forecasts.

Looking to the future, American Express aims for a 10% revenue growth and continues to concentrate on boosting organic spend, acquiring new cohorts like Millennials and Gen-Zs, and optimizing net interest income dynamics. The company's strategic endeavors in the restaurant industry, acquisitions of Tock and Rooam, and the revamp of the Gold Card underscore its commitment to meeting evolving consumer needs and fostering engagement among cardholders.