Affirm Holdings reported fiscal fourth-quarter earnings of $1.17 billion, surpassing the LSEG estimate of $1.11 billion, which contributed to a 7% rise in its stock price. CEO Max Levchin noted that high gas prices, currently averaging $4.09 per gallon, are influencing consumer spending habits, leading shoppers to seek assistance in managing their budgets.
Despite a decrease from May's peak of over $4.50, gas prices remain significantly elevated compared to pre-Iran war levels. Levchin emphasized that inflationary pressures are driving demand for Affirm's services, as consumers become more cautious with their spending. The annual inflation rate was reported at 3.7% in July, with personal income and spending showing stronger-than-expected growth.
Affirm's gross merchandise volume reached $14.1 billion, exceeding the $13.39 billion expectation, and the company anticipates first-quarter revenue between $1.19 billion and $1.22 billion, above the $1.16 billion forecast. Levchin acknowledged the overall health of consumers but expressed caution regarding sustained price pressures, which could pose long-term challenges.
This context is crucial as the Federal Reserve, led by Chairman Kevin Warsh, prepares for its upcoming policy decisions