The cruise company raised its full-year adjusted EPS guidance to $17.73–$17.87 but cut its revenue growth forecast from ~10% to ~9%
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Royal Caribbean $RCL reported second-quarter adjusted earnings of $4.21 per share on Tuesday, topping analyst expectations of $3.98 per share, according to Reuters. The company also lifted its full-year adjusted earnings outlook to $17.73–$17.87 per share, a step up from the $17.10–$17.50 range it had previously guided to.
Royal Caribbean also pulled back its annual revenue growth target to roughly 9% from roughly 10%, pointing to what it described as a softening in demand for certain sailings as a result of ongoing geopolitical tensions, the company said.
For the three months through June 30, revenue climbed to $4.83 billion, a 6% increase from the prior year period. That result narrowly cleared the $4.82 billion analysts had forecast, according to Reuters. Net income attributable to the company came in at $1.13 billion, or $4.20 per share diluted, compared with $1.21 billion, or $4.41 per share diluted, in the same period a year earlier.
Despite the booking pressure on some itineraries, Royal Caribbean said overall demand remained healthy. The company noted it remained booked at record prices and that booking volumes were above last year's levels.
"Consumer demand for our vacation experiences is strong, and guests continue to demonstrate a desire to spend on memorable experiences with us," Chief Financial Officer Naftali Holtz said in a statement. Holtz added that while it is still early, 2027 booking trends are running ahead of historical levels, including for itineraries where geopolitical developments weighed on demand this year.
Second-quarter fuel costs totaled $355 million, surging 27% compared with the same period last year. On the full-year outlook, the company edged its fuel expense estimate down to about $1.34 billion from the roughly $1.35 billion it had previously projected. Royal Caribbean stock was down about 1% in premarket trading.
Royal Caribbean cut its full-year adjusted profit forecast in April, reducing EPS guidance to $17.10–$17.50 from $17.70–$18.10, as higher fuel costs and geopolitical disruptions to Middle Eastern itineraries weighed on the outlook. At the time, first-quarter adjusted EPS of $3.60 had come in well ahead of analyst expectations, and the company said bookings for affected itineraries had recovered and were running above prior-year levels.
For the third quarter, Royal Caribbean expects adjusted EPS in the range of $6.26 to $6.36, with total revenue growth of approximately 8%, the company said.
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