by Michelle Chapman

American Express posted higher profits and sales in the second quarter, as well as increased credit card usage, but its stock fell before the market opened as it secured more cash for possible payment defaults.

Analysts surveyed by Zacks Investment Research said the card issuers made $2.17 billion in profits, or $2.89 per share, beating Wall Street’s $2.80 estimate. The company earned $1.96 billion, or $2.57 per share, in the year-ago quarter.

The total allowance for credit losses was $1.2 billion. The New York-based company cited an increase in net write-offs to $327 million in net reserves, compared with $410 million in the same period last year, compared with $58 million in the same period last year.

The stock fell nearly 4% before the market opened on Friday.

Revenues, excluding interest expense, increased from $13.4 billion to $15.05 billion driven by higher average loans and higher cardmember spending. It fell short of Wall Street’s forecast of $15.42 billion.

Cardmember spending increased 8% at constant currency, driven by double-digit growth in US consumer and international cardmember spending. People continue to spend on travel and entertainment, a category that grew 14% in the quarter.

Millennial and Gen Z consumers account for over 60% of new accounts acquired globally. Their spending in the US increased 21% year-over-year.

Private consumption remains strong despite rising inflation, Job market remains strong.

The Department of Commerce reported this week: retail sales It rose 0.2% from May to June. Economists focused Tuesday on data that exclude volatile autos, gas, building materials and food services, which rose 0.6% in June. That 0.6% figure is used to calculate overall US economic growth, and June was pretty strong.

American Express left its full-year forecasts for earnings of $11 to $11.40 a share and sales up 15% to 17%.