On October 26, 2023, Royal Caribbean Group (RCL, Financial) released its third quarter earnings report, revealing a strong performance driven by robust demand and onboard revenue growth. The company reported Q3 Earnings per Share (EPS) of $3.65 and Adjusted EPS of $3.85, surpassing its own guidance. This positive outcome was attributed to stronger close-in demand and further strength in onboard revenue.
Financial Highlights
RCL's Q3 results showed Gross Margin Yields increased 19.1% As-Reported, and Net Yields increased 16.7% in Constant-Currency (16.9% As-Reported), both compared to the third quarter of 2019. Gross Cruise Costs per Available Passenger Cruise Day (APCD) increased 14.4% As-Reported, and Net Cruise Costs (NCC), excluding Fuel, per APCD increased 10.3% in Constant-Currency (10.1% As-Reported), both compared to Q3 2019.
Total revenues for the quarter were $4.2 billion, with Net Income of $1.0 billion or $3.65 per share, Adjusted Net Income was $1.1 billion or $3.85 per share, and Adjusted EBITDA was $1.7 billion.
Full Year Outlook
For the full year 2023, RCL expects Net Yields to increase 12.9% to 13.4% in Constant-Currency (12.4% to 12.9% As-Reported), compared to 2019. NCC, excluding Fuel, per APCD is expected to be up 7.0% to 7.5% in Constant-Currency (6.5% to 7.0% As-Reported), compared to 2019. Adjusted EPS is expected to be in the range of $6.58 to $6.63 per share.
Company Commentary
“The strength of our brands and the acceleration of consumer spending on experiences have propelled us towards another outstanding quarter and a robust 2023,” said Jason Liberty, president and CEO, Royal Caribbean Group. “Looking ahead, we see accelerating demand as we build the business for 2024. Our booked load factors are higher than all prior years and at higher rates, further supporting our trajectory towards the Trifecta goals,” added Liberty.
Future Prospects
Bookings remained strong throughout the third quarter, significantly exceeding 2019 levels. Demand for 2024 has continued to accelerate, with bookings significantly and consistently outpacing 2019 levels. The company's new ships, existing hardware, and the expansion of Perfect Day at CocoCay, and Hideaway Beach, have been well received, positioning the company for strong yield and earnings growth in 2024.
As of September 30, 2023, the company’s liquidity position was $3.3 billion, which includes cash and cash equivalents and undrawn revolving credit facility availability. During the third quarter, the company repaid $775 million of debt, including $500 million of its 11.50% senior secured notes due June 2025.
Explore the complete 8-K earnings release (here) from Royal Caribbean Group for further details.
