American Express reported its Q2 2023 revenue was short of expectations, sending the company’s share price tumbling by 4.4% at the Friday market open. The credit card issuer faces challenging comparisons to previous quarters, which displayed more substantial increases in travel and entertainment spending as consumers welcomed the end of coronavirus-induced restrictions.

Amex Network Volumes Miss Estimates

Shares of American Express dipped sharply on Friday after the payments card issuer reported disappointing financial results for Q2 2023 a day earlier. The stock was down 4.4% at the time of writing, sitting at $169.36 per share.

The dip comes as investors jumped ship following Amex’s earnings figures that showed slower-than-expected revenue growth in the three months while spending growth on the company’s cards hit the lowest level in over two years. Revenue stood at $15.05 billion in the quarter, compared to the estimated $15.48 billion. Furthermore, American Express’s network volumes rose 8%, marking the weakest gain since Q1 2021 and below Wall Street estimates.

Overall, the total network volume climbed to $426.6 billion. While that was a record high for the Buffalo, New York-based financial technology giant, it was still below the consensus estimates of $441.6 billion. Meanwhile, travel and entertainment spending surged by 14% during the period, with the bulk of that increase coming from restaurants and dining categories.

“You saw an increase during the pandemic in people taking deliveries from restaurants. As people returned to in-person dining, they haven’t necessarily abandoned that.”

– Amex CFO Jeff Campbell said.

Consumer Spending Habits and the Pandemic

Amex’s spending numbers point to a notable change in consumer spending habits among US residents as the world recovers from the devastating coronavirus pandemic. According to the Bureau of Labor Statistics (BLS), consumer spending during Q2 2020 was 9.8% lower than in the same period a year earlier.

Then in 2021, the ramifications of Covid-19 were still evident in consumer spending 2021, but businesses and consumers started to adapt. d

This year, both the US economy and consumers are demonstrating mixed signals. Notably, despite concerns over rising prices and job security, US consumers are still spending. However, due to persisting inflation, they are rotating away from expensive brands to save money but are also keen on splurging on certain goods and services.

This article originally appeared on The Tokenist

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