Consumer Spending Helps Put AmEx Within a Whisker of Pre-Pandemic Times

American Express Co. posted second-quarter numbers Friday indicating the card giant is very nearly back to its pre-pandemic performance and reflecting a steady recovery from the travel restrictions that hampered the company for most of 2020.

Driving the improved results was steady improvement in the company’s vital travel-and-entertainment business and increased usage from younger cardholders, the company said. “We saw Card Member spending accelerate from the prior quarter and exceed pre-pandemic levels in June, with the largest portion of this spending growth coming from Millennial, Gen Z, and small business customers,” said Stephen Squeri, AmEx’s chairman and chief executive, in a statement.

Total network dollar volume worldwide for the quarter was up 46% year-over-year and down 2% from the same quarter in 2019. AmEx did not release actual volume totals. The 2% drop from 2019’s second quarter was an improvement on the 11% decline AmEx posted in the first quarter compared to the same period two years ago. 

Worldwide consumer volume online was up 21% compared to last year’s second quarter and also came in fully 38% higher than the same period two years ago. Consumers fled to their phones and computers as the pandemic set in, with many of them shopping online for the first time. But in-person consumer volume also improved, equaling the total seen two years ago and finishing 48% over 2020’s second quarter.

Improving consumer volumes helped drive increases in the fee volume AmEx earns from merchants that accept the company’s cards. Discount revenue for the second quarter—62% of AmEx’s total revenue—came to $6.3 billion, up fully 58% year over year and up more than 20% from the first quarter. The second-quarter total, indeed, was nearly back to the $6.6 billion recorded two years ago. 

AmEx’s average discount rate in the quarter registered at 2.3%, down slightly from 2.37% in 2019’s second quarter but up from 2.23% a year ago and 2.26% in the first quarter.

For the quarter, total revenue from all sources came to $10.2 billion, up 33% from 2020’s second quarter.