Affirm Shares Jump as Strong Forecast Outweighs Consumer Spending Concerns

Affirm Holdings stock climbed 7% on Friday after the buy now, pay later company posted stronger-than-expected fiscal fourth-quarter results. CEO Max Levchin noted that elevated gas prices are beginning to influence consumer behavior across the United States.

“The U.S. consumer undoubtedly sees the higher gas prices, so they can’t ignore that,” Levchin said in an interview with CNBC’s “Squawk Box.” “They’re also coming to us to help manage those prices across all the various inflationary points.”

According to AAA data, the national average price for gasoline stood at $4.09 per gallon as of Friday. While this represents a decline from May, when prices surpassed $4.50 per gallon, it remains significantly higher than levels seen before recent geopolitical tensions.

The national average last traded below $3 on March 2.

“In times of inflation, we see more demand because folks are budgeting,” Levchin explained. “They’re more thoughtful about how they want to use the money, and we’re there to help.”

The annual inflation rate reached 3.7% in July, based on the latest personal consumption expenditures price index data.

The PCE, which serves as the Federal Reserve’s preferred inflation measure, rose 0.2% on a seasonally adjusted basis in July. Other indicators pointed to underlying consumer resilience, with personal income climbing 0.4% and spending increasing 0.2%, both exceeding analyst expectations.

These mixed signals present a challenge for the Federal Reserve and its leadership as they prepare for their next policy decision at the September meeting.

Despite this economic uncertainty, Levchin indicated that the broader consumer environment remains fundamentally healthy, though he acknowledged some cause for caution.

“I do think that sustained pressure on prices isn’t great in the long term, and so we can’t ignore that either,” he remarked.

Affirm released its fourth-quarter results after market close on Thursday, reporting revenue of $1.17 billion, which surpassed the LSEG consensus estimate of $1.11 billion. Looking ahead, the company projects fiscal first-quarter revenue between $1.19 billion and $1.22 billion, comfortably above the Street consensus of $1.16 billion.

Gross merchandise volume also delivered an impressive performance, reaching $14.1 billion and significantly exceeding the $13.39 billion expectation from StreetAccount.

Affirm stock chart.

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