Affirm Holdings Buy Now shares soared 7% on Friday as the pay later company reported strong fiscal fourth-quarter profits and CEO Max Levchin said high gas prices were weighing on shoppers.
“American consumers are definitely aware that gas prices are going up, so we can’t ignore it, we can’t ignore it,” Levchin said on CNBC’s “Squawk Box.” “They are also coming to us to help manage prices across various inflation points.”
As of Friday, the national average price for gasoline was $4.09 per gallon, according to AAA data. That’s down from May, when gas prices topped $4.50, but still far above pre-Iran war levels.
The last time the national average was below $3 was March 2nd.
“During inflation, demand increases because people budget,” Levchin told CNBC. “They are being more careful about how they spend their money, and we can help them do that.”
Annual inflation remained at 3.7% in July, according to the latest Personal Consumption Expenditure Price Index figures.
PCE, the Fed’s preferred forecasting tool, rose a seasonally adjusted 0.2% in July, but other data showed some consumer strength. Personal income rose 0.4% in July, and spending rose 0.2%, both exceeding expectations.
All of this is weighing on the Fed and Chairman Kevin Warsh, who will decide its next policy course at its September meeting.
Levchin told CNBC that while consumers are generally healthy, there are reasons to be cautious.
“We don’t think the sustained pressure on prices will be significant in the long run, and we can’t ignore that,” he said.
The fintech company released its fourth-quarter results after the bell on Thursday, reporting revenue of $1.17 billion, beating LSEG’s estimate of $1.11 billion. Affirm said it expected first-quarter fiscal revenue to be between $1.19 billion and $1.22 billion, beating the street estimate of $1.16 billion.
The gross merchandise value was also outstanding at $14.1 billion, easily exceeding StreetAccount’s forecast of $13.39 billion.
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