- Royal Caribbean raised its full-year guidance after a stronger-than-expected third quarter, now expecting 2026 adjusted EPS of $17.85 to $17.95. The midpoint of $17.90 sits slightly above the $17.82 analyst estimate (Lumida calculation).
- Demand for European and Caribbean sailings helped offset soaring fuel costs tied to the conflict in the Middle East. CEO Jason Liberty said demand “remains strong” and that 2027 bookings are pacing ahead of historical levels.
- Jefferies’ David Katz said the third-quarter beat was “partially offset” by weaker-than-expected fourth-quarter guidance, though 2027 commentary was “positive.” Vital Knowledge’s Adam Crisafulli said the cruise line is performing “very well considering the fuel environment.”
- Peer Carnival raised its outlook last month on strong European bookings, pointing to sector-wide strength. Royal Caribbean plans to split 2027 capacity equally between Europe and the Caribbean to meet demand.
What Happened?
Royal Caribbean Cruises raised its full-year guidance on Tuesday after a better-than-expected third quarter. The Miami-based cruise line now sees 2026 adjusted earnings per share of $17.85 to $17.95, above estimates of $17.82. Liberty said 2027 bookings are running ahead of historical levels. Demand for European and Caribbean itineraries drove the quarter despite higher fuel costs.
Why It Matters?
Cruise demand is holding up even as consumers face high prices, which suggests travelers are still prioritizing vacations. The ability to raise guidance despite soaring fuel costs shows pricing power. But the weaker fourth-quarter outlook shows fuel is still squeezing near-term margins.
What’s Next?
Investors will watch fuel prices and the Middle East conflict, the biggest swing factor for costs. Strong 2027 booking trends and the Europe-Caribbean capacity split will be key to next year’s outlook. Carnival’s results will offer another read on whether demand strength is industrywide.
Affected Tickers and Coins: RCL, CCL
Source: Bloomberg
