American Express (AXP) - Get Report cautioned Tuesday that the global coronavirus pandemic would hit its revenue growth targets in the near-term, after noting a "softness" in consumer spending near the end of last month.
American Express said it now sees first quarter revenue growth in the region of 2% to 4%, down from around 9% over the final three months of last year and its earlier 2020 forecast of between 8% and 10%. Adjusted earnings, American Express said, would likely come in between $1.90 and $2.10 per share, compared to a Refinitiv forecast of $2.17 per share.
The group also said it wasn't able to project estimates beyond the first quarter amid the coronavirus outbreak and its acceleration in the United States and elsewhere,
“American Express has a long runway to deliver strong, long-term performance, driven by our differentiated business model and our focus on our strategic imperatives,” said CEO Stephen Squeri. “We have a long track record of navigating through uncertain economic periods by focusing on our disciplined operational and strategic execution, our dedicated colleagues, and the deep relationships we have with our customers and partners."
"We will continue our strategy of investing in share, scale and relevance, and we are focused on running the company for the long term,” he added.
American Express shares were marked 0.24% higher in early Tuesday trading immediately following the earnings update to change hands at $86.08 each.
Earlier Tuesday, the Commerce Department reported that U.S. retail sales fell 0.5% last month, compared to a Street consensus forecast of a 0.1% gain, as consumers cut back on spending as the coronavirus began to impact domestic life in the world's biggest economy.
"History shows that the retail sales numbers are more likely to be revised up than down, and these data look too low," said Ian Shepherdson of Pantheon Macroeconomics. "But: It doesn’t matter. These data pre-date the hit from the coronavirus, and March sales, ex-food and household supplies, are likely to plunge, given lockdowns around the country."