The company expects robust performance, citing high-income customers’ continued spending despite economic challenges.

American Express (AmEx) has projected an optimistic profit outlook for 2024, buoyed by the resilience of its affluent customer base, which continues to spend despite the pressures of elevated interest rates. The company’s forecast for the year exceeded analysts’ expectations, driving its stock up nearly 3% ahead of market opening on January 26, 2024.

AmEx, which caters primarily to higher-income consumers, reported record revenues for 2023, a year when many analysts had predicted a recession would dampen consumer spending. The company’s customer demographic, typically less sensitive to inflation and rising borrowing costs, has allowed it to weather financial challenges more effectively than many of its competitors.

“We have achieved what we set out to do, and we are ahead of where we thought we’d be on our journey,” said Stephen Squeri, CEO of American Express. Despite this optimism, AmEx exercised caution by raising its loan loss provisions for the fourth quarter to US$1.44 billion, compared to US$1.03 billion in the same period last year, reflecting concerns over potential economic headwinds.