Royal Caribbean Q3 2026 Adjusted EPS Rises 14%

Royal Caribbean Group reported double-digit growth in third-quarter adjusted earnings as higher capacity, full ships and lower cruise costs excluding fuel supported profitability, even as constant-currency net yield growth remained modest. The cruise operator also set its 2026 adjusted earnings forecast at $17.85 to $17.95 per share, compared with its July range of $17.73 to $17.87.

For the quarter ended Sept. 30, adjusted earnings per share rose 14% from a year earlier to $6.57. Adjusted EBITDA increased 11% to $2.54 billion, representing an adjusted EBITDA margin of 45.4%. Operating cash flow totaled $1.6 billion.

Net yields increased 0.6% year over year in constant currency, while net cruise costs excluding fuel declined 1.8%. The load factor was 112.4%, up from 112.1% a year earlier, indicating that some cabins carried more than two passengers.

Royal Caribbean carried 2.68 million passengers during the quarter, compared with 2.47 million in the prior-year period. Passenger cruise days rose to 16.69 million from 15.36 million, while available passenger cruise days, the company’s measure of capacity, increased to 14.84 million from 13.70 million.

Full-Year and Fourth-Quarter Outlook

Royal Caribbean expects 2026 capacity to increase 6.6% from 2025, with approximately 56.8 million available passenger cruise days. Full-year net yield growth is projected at about 2.1% in constant currency, while net cruise costs excluding fuel are expected to be approximately flat.

The company’s latest adjusted EPS range incorporates what it described as a $0.21 permanent third-quarter beat, excluding cost timing, partly offset by an estimated $0.11 fourth-quarter impact from foreign exchange and fuel rates. Full-year fuel expense is forecast at approximately $1.35 billion, with depreciation and amortization of $1.87 billion to $1.89 billion and net interest expense of $995 million to $1.01 billion.

For the fourth quarter, Royal Caribbean expects adjusted EPS of $3.48 to $3.58. Capacity is projected to grow 5%, while constant-currency net yields are expected to increase between 4.2% and 4.7%. Net cruise costs excluding fuel are forecast to decline between 0.9% and 1.4% in constant currency. Fourth-quarter fuel expense is estimated at about $379 million.

Expansion Beyond Ocean Cruises

Alongside its quarterly results, Royal Caribbean outlined plans to capture a larger share of customers’ overall vacation spending by expanding beyond ocean cruises. The presentation highlighted river cruising and all-inclusive resorts as additional vacation categories, including a proposed joint venture with Sandals and Beaches Resorts. The transaction’s closing timing and expected financial contribution remain subject to uncertainty.

The group currently has 71 ocean ships, including those operated by TUI Cruises, and expects that figure to reach 81 when ships on order are included. It also has 20 river ships on order and sails to more than 1,000 destinations across all seven continents. Its broader portfolio includes 18 all-inclusive resorts in the Caribbean, four destination experiences in operation and four more planned.

Management said its strategy is focused on differentiated vacation experiences, deeper customer relationships and greater use of data, technology, artificial intelligence, loyalty programs and co-branded credit cards. The company estimates that it currently captures 20% to 25% of its guests’ five-year vacation spending.

Royal Caribbean also reiterated its Perfecta program goals, which target a 20% compound annual growth rate in adjusted EPS from 2024 and return on invested capital of at least 17% by the end of 2027. The company said it intends to pursue those targets through moderate capacity and yield growth, disciplined cost control and the maintenance of solid investment-grade credit metrics.

The outlook remains exposed to changes in fuel prices, foreign exchange rates and interest rates, as well as economic and geopolitical conditions, tariffs, operating-cost inflation and the availability and cost of air travel. Other identified risks include severe weather, disease outbreaks, shipyard delays, port availability, industry capacity growth, cybersecurity incidents, regulatory changes and execution risks associated with acquisitions and new ventures.