NEW YORK — For decades, American Express was the undisputed credit card of choice among corporate road warriors, the wealthy and the well-traveled, who lived by the company’s slogan, “Don’t leave home without it.”
But changing consumer habits, extremely aggressive competition and increased pushback from its merchants are putting heavy pressure on AmEx.
Rivals are trying to steal business away — and are succeeding in some cases.
Costco, for example, is ending its 15-year relationship with AmEx and defecting to Citigroup and Visa starting next March. And airlines that used to give VIP lounge access to AmEx cardholders have been switching in recent years to other credit card companies.
Compounding its troubles, AmEx recently lost a major government antitrust lawsuit, a verdict that could damage its ability to compete.
“The competitive environment for AmEx is very challenging,” said Jason Arnold, a Wall Street analyst who covers AmEx for RBS Securities. “Major competitors have all directed their efforts to take chunks away from their business. They’ve got serious problems.”
As a result, American Express stock is down 12 percent this year. Analysts, on average, have cut their 2015 profit forecast from $6.2 billion to $5.6 billion. AmEx recently announced 4,000 layoffs, or about 6 percent of its workforce. And CEO Kenneth Chenault will face a skeptical Wall Street audience Wednesday at the company’s annual investor day.
