Thread by @compound248

AmEx ($AXP) reported Q3. Bellweather for consumption & travel

• TOTAL spend volume passed 2019
• Global Travel & Entrtnmnt still off (will hit 80% of 2019 in Q4)
• Loan balances keep paying down (people reducing debt)
• Gen Z & Millnls biz up huge
• Perfmnc marketing💪

1/x

Look at Millnnils & GenZ. 70% of new platinum adds in this demo.👇

Part of this is aging into the product.

But also performance marketing combined w/ rewards positioning of AmEx cards. AmEx has unmatched travel & "experience" rewards + superior online/digital self-service.

2/x

Large & Global Corp spending - which is heavily influenced by business travel (and meals, client-facing events, etc.) - still down massively.

W/r/t travel:
- US is 80%+ of 2019
- Int'l still down by 50%

AmEx is becoming more and more of a consumer & SMB spend product.

3/x

Lest people think consumers and SMBs don't want cards - much less premium AmEx cards - its membership fees and cards issued continue to grow nicely.

Philosophically, AmEx uses membership fees to reinvest *heavily* in rewards & differentiation: scale economics shared...

4/x

...& AmEx is using its strong performance to return HUGE capital to owners (supported by releasing credit reserves that built up in 2020).

Management exudes confidence about the future (assuming a sanguine macro-environment), driven by huge success on customer acquisition.

End

Side Note re: BNPL
Not yet a substantial competitor (as generally used). BNPL tends to be down-market & a customer acquisition tool. AmEx has BNPL built into its cards that is more flexible ("accepted" everywhere AmEx is accepted) & has substantial rewards benefits.

Monitoring.

Believe FinTech SMB platforms like Brex & Ramp are worth watching. Bought @KabbageInc (competes in this space). AmEx notes SMB +13% on the Q.

Combined w/ very strong:
• Brand
• Balance sheet
• 3 million SME cardholders
• Digital investments

...in good shape but more to do.