American Express Share Price Drops Due to Rising Expenses
Shares of American Express (NYSE: AXP) fell more than 6% in early trading following the release of its second-quarter results. While revenue and earnings per share showed strong growth, investors were concerned about a significant rise in expenses. Revenue net of interest expense reached $19.6 billion, up 10%, driven by higher card member marketing costs. Earnings per share rose to $4.53, exceeding expectations slightly but not enough to offset investor concerns over the company's rising operational costs. Expenses increased 12% year-over-year to $14.5 billion and are expected to remain elevated through the end of 2026 due to continued marketing efforts aimed at attracting younger consumers like millennials and Gen Z. The CFO, Christophe Le Caillec, noted that marketing expenses will rise by an additional 10% in the second half of the year. While this strategy has helped Amex gain traction with a growing demographic, it raises concerns about profitability sustainability.
Topics: American Express expenses Q2 earnings stock price drop