American Express Shares Drop Over Rising Expenses Despite Strong Earnings
Shares of American Express (NYSE: AXP) fell more than 6% in early trading after the company reported second-quarter results. While revenue and earnings per share rose, investors were concerned about a significant increase in expenses. Revenue net of interest expense reached $19.6 billion—a 10% year-over-year gain—driven by higher card member marketing costs. Earnings per share climbed to $4.53, exceeding expectations but not enough to offset worries over rising operational costs. Expenses grew 12%, reaching $14.5 billion in the quarter and are expected to remain elevated through late 2026 due to increased spending on card marketing initiatives. The company has been targeting younger demographics like millennials and Gen Z, which is a strategic win but comes at higher acquisition costs. This trend suggests that while growth remains strong, profitability could face pressure from ongoing expense increases.
Tickers: $AXP