Earnings Roundup: American Express, Gift Voucher Shop (Jan. 22, 2012)
Jan. 22, 2013
American Express Co. and The Gift Voucher Shop (GVS), the U.K.-based provider of the One4all multistore gift card, recently released financial results.
American Express reported net income of $637 million for the fourth-quarter ended Dec. 31, a decrease of 47 percent, compared with $1.2 billion a year ago. Q4 net income was affected by, among other factors, a $400 million restructuring charge designed to contain future operating expenses, adapt parts of the business as more customers transact online or through mobile channels and provide resources for additional growth, according to the company.
“Since rebounding from the recession, we have gained share in a very competitive U.S. industry and enhanced the many benefits we provide card members,” said CEO Kenneth I. Chenault. “We have improved our risk management capabilities, begun to tap additional revenue streams and deployed new technologies that let us serve a growing number of customers online and through their mobile phones.”
In response to a question during an earnings call concerning the company’s stated goal of achieving $3 billion in fee revenue by the end of 2014, CFO Daniel T. Henry said neither a challenging economy nor the other factors that affected income are cause for the company to lower expectations.
“We are about halfway through the time frame and [we] still think it’s appropriate, although I would say that $3 billion is an ambitious target given the uneven economy,” said Henry, according to a Seeking Alpha transcript. “There’s a lot of work to do, but we’re moving forward on a number of fronts. The loyalty department is a good example of building fee services [and] the early returns that we’re seeing on Bluebird in the reloadable prepaid space is another example where we think we can be successful.”
GVS reported a 14 percent increase in annual sales for 2012 to more than EUR150 million (US$199.7 million), which was attributed to increased sales across all distribution channels, including Post Office, PostPoint, online and corporate sales.
“Despite a challenging retail environment, we are seeing continued demand for One4all Gift Cards both online and through more traditional channels such as the post office,” said GVS Group CEO Michael Dawson. “We can attribute our growth to a number of factors, including a gradual increase in business confidence which has boosted corporate sales but also a general trend among consumers towards more practical and flexible gifts.”
