Royal Caribbean, a major player in the cruise industry, recently announced their first-quarter earnings which surpassed analysts’ expectations. The company reported an adjusted EPS of $1.77, exceeding the consensus estimate of $1.32. Additionally, revenue for the quarter came in at $3.7 billion, higher than the expected $3.69 billion. This strong performance was attributed to robust demand and increased onboard spending, leading to a significant rise in both revenue and earnings compared to the same quarter last year.
In response to their outstanding first-quarter results, Royal Caribbean has raised their full-year 2024 adjusted EPS guidance to a range of $10.70 to $10.90, well above the consensus of $10.06. President and CEO Jason Liberty expressed his enthusiasm about the company’s performance, emphasizing the strong demand for their brands and the exceptional experiences they offer. This upbeat forecast includes a projected 60% earnings growth year over year, showcasing Royal Caribbean’s positive momentum in the market.
During the first quarter, Royal Caribbean saw a load factor of 107% and gross margin yields increased by 60.3% as-reported. Net yields also experienced a notable uptick of 19.3% in constant currency compared to the previous year. The company’s net income showed a significant improvement, standing at $360 million, a stark contrast to the net loss of $48 million reported in the first quarter of the previous year. Looking ahead, Royal Caribbean anticipates further growth, with net yields expected to increase by 9.0% to 10.0% in constant currency for the full year 2024.
Royal Caribbean’s booking momentum remains robust, with the WAVE season setting new records in both demand and pricing. The company is currently in a record booked position for 2024, with rates ahead of where they were at the beginning of the year. Onboard spending and pre-cruise purchases have also exceeded previous years, further contributing to the positive outlook for the company. Moving into the second quarter of 2024, net yields are projected to increase by 10.20% to 10.70% in constant currency, while adjusted EPS is forecasted to fall within the range of $2.65 to $2.75.
The impressive financial results and optimistic guidance provided by Royal Caribbean have resonated well with investors, as evidenced by the stock’s positive movement post-announcement. With the cruise industry showing signs of a strong recovery, Royal Caribbean’s strategic initiatives appear to be positioning the company for sustained growth in the global vacation market. This positive outlook and strong performance bode well for Royal Caribbean as they continue to navigate the evolving landscape of the travel industry.