American Express (NYSE:AXP) delivered another strong quarter, with earnings climbing to $2.51 billion, or $3.49 per share, surpassing analysts' estimates and reflecting an 8% revenue boost to a record $16.6 billion. Yet, despite these solid numbers, investor sentiment took a hit as shares dropped nearly 5%, following management's guidance for revenue growth to land at the lower end of its 9-11% forecast. The cautious outlook aligns with consumer spending trends, as even affluent cardholders show signs of restraint, leading to a 6% rise in billing growthsteady but not stellar.

CEO Stephen J. Squeri remains bullish, raising full-year EPS guidance to $13.75-$14.05, backed by a strategic push to refresh products and attract 3.3 million new premium customers, particularly Millennials and Gen-Z, who now dominate new account growth. Meanwhile, rising credit provisions to $1.4 billion reflect higher net write-offs from increased loan volumes. CFO Christophe Le Caillec acknowledged a shift in consumer behavior, with cardholders adopting a more cautious stance amid economic uncertainty, tempering expectations for the remainder of the year.

Despite recent volatility, Amex's stock has outperformed, soaring 85% in the past twelve months, signaling confidence in its business model's resilience. Analysts like William Blair's Cristopher Kennedy see opportunities ahead, with Amex's ability to drive earnings growth without hitting the high end of revenue targets. As the company navigates a more measured growth trajectory, it's the evolving spending habits of premium customers and broader economic shifts that will shape its path forward.

This article first appeared on GuruFocus.