MIAMI, Oct. 27, 2026 /CNW/ -- Royal Caribbean Group (NYSE: RCL) today reported third quarter Earnings per Share ("EPS") of $6.45 and Adjusted EPS of $6.57. These results were better than the company's guidance, driven by strong close-in demand and lower costs due to timing. The company now expects full year Adjusted EPS to be in the range of $17.85 to $17.95. The increase in earnings expectations reflects the stronger-than-expected third quarter performance partially offset by higher than anticipated fuel costs (based on current at-the-pump rates) and currency exchange rates.
"Our third quarter results reflect continued strong consumer demand for our vacation experiences and the accelerated momentum across our industry leading brands," said Jason Liberty, Chairman and CEO, Royal Caribbean Group. "Our strategy to turn the vacation of a lifetime into a lifetime of vacations is propelling our business by leveraging our leading brands, differentiated experiences, loyalty platform and technology capabilities to deepen guest relationships, increase vacation frequency and capture a greater share of the growing global vacation market. Taking further advantage of our leading vacation platform, the recently announced partnership with Sandals and Beaches Resorts is intended to drive significant shareholder value as we expand our vacation ecosystem, giving guests more ways to vacation with us across more occasions."
"Demand for our leading vacation experiences remains strong, and while it is still early, 2027 bookings are pacing ahead of historical levels at higher rates," Liberty continued. "2027 also marks the final year of our Perfecta target period. The underlying business is performing well ahead of our initial expectations, and based on the forward fuel curve, we remain on track to achieve our Perfecta goals of delivering 20% Adjusted EPS CAGR from 2024 through 2027, or a $20-handle in 2027. We are currently already above our ROIC target."
Third Quarter 2026:
-- Total revenue was $5.6 billion, a 9% increase year over year. Load factor
in the third quarter was 112%.
-- Gross Margin Yields decreased 0.8% as-reported. Net Yields increased 0.9%
as-reported and 0.6% in Constant Currency, driven by better-than-expected
close-in demand in Europe and the Caribbean.
-- Gross Cruise Costs per Available Passenger Cruise Days ("APCD") decreased
0.7% as-reported. Net Cruise Costs ("NCC"), excluding Fuel, per APCD
decreased 1.9% as-reported and 1.8% in Constant Currency, due to the
timing of expenses that shifted into the fourth quarter.
-- Net Income was $1.7 billion or $6.45 per share, Adjusted Net Income was
$1.8 billion or $6.57 per share, and Adjusted EBITDA was $2.5 billion.
Full Year 2026 Outlook:
-- Revenue is expected to grow 9% year over year. Net Yields are expected to
increase approximately 2.7% as-reported and approximately 2.1% in
Constant Currency.
-- NCC, excluding Fuel, per APCD are expected to increase approximately 0.4%
as-reported and be approximately flat in Constant Currency.
-- Adjusted EPS is expected to be in the range of $17.85 to $17.95.
Sandals and Beaches Resorts Partnership
In September, Royal Caribbean Group announced an agreement to acquire a 50% interest in Sandals and Beaches Resorts, expanding the company's vacation platform into the all-inclusive resort category. The Sandals and Beaches Resorts' portfolio includes 18 resorts across the Caribbean and three resorts under development. It also includes over 1,000 acres of undeveloped land in the Caribbean, including acreage adjacent to existing resorts, creating a meaningful runway for continued growth.
Sandals and Beaches are leading brands in the all-inclusive resort category, with high brand awareness, strong guest satisfaction and a loyal customer base. The portfolio has benefited from significant investment in recent years, including physical upgrades across the resorts and continued enhancements to the guest experience. The partnership will preserve the identity, operating leadership, and Caribbean character of the brands, while providing additional resources and capabilities to support continued value creation. Approximately 30% of Royal Caribbean Group guests also take all-inclusive vacations, while a similar percentage of Sandals and Beaches guests also cruise, creating a significant opportunity to introduce each portfolio to new guests and capture a greater share of the vacations they already take.
"Our mission is to deliver the best vacation experiences responsibly. Sandals and Beaches Resorts extend our platform into an attractive adjacent category, unlocking more ways to deliver on that mission," said Jason Liberty, Chairman and CEO, Royal Caribbean Group. "Underpinned by the strength and significant growth opportunities of our core business, this investment accelerates our strategy to capture a greater share of the rapidly growing vacation market. By bringing together Sandals and Beaches' hospitality and Caribbean expertise with our global commercial reach, loyalty and technology capabilities, we see meaningful opportunities to reach new guests, increase vacation frequency, and leverage our combined scale to create additional synergies and value over time."
The investment is expected to close in early 2027, subject to customary closing conditions and regulatory approvals. The company's share of earnings from Sandals and Beaches Resorts is expected to be immediately accretive, with contribution in 2027 dependent on the timing of the transaction close. The investment is expected to be accounted for under the equity method, with results reported on a one-quarter lag. The expected contribution from Sandals and Beaches Resorts will be incorporated into the company's 2027 guidance, along with related detail, upon closing.
Third Quarter 2026 Results
Net Income for the third quarter of 2026 was $1.7 billion or $6.45 per share compared to Net Income of $1.6 billion or $5.74 per share for the same period in the prior year. Adjusted Net Income was $1.8 billion or $6.57 per share for the third quarter of 2026 compared to Adjusted Net Income of $1.6 billion or $5.75 per share for the same period in the prior year. The company also reported total revenues of $5.6 billion and Adjusted EBITDA of $2.5 billion.
Capacity for the third quarter was up 8% year over year and the company delivered memorable vacations to 2.7 million guests, a 9% increase year over year. Total revenue increased 9% year over year. Gross Margin Yields decreased 0.8% as-reported, and Net Yields increased 0.9% as-reported (0.6% in Constant Currency), when compared to the third quarter of 2025. Load factor for the quarter was 112%. Net Yield growth exceeded the company's guidance primarily driven by better than expected close-in demand in Europe and the Caribbean.
Gross Cruise Costs per APCD decreased 0.7% as-reported, compared to the third quarter of 2025. NCC, excluding Fuel, per APCD decreased 1.9% as-reported (and decreased 1.8% in Constant Currency), when compared to the third quarter of 2025. The better-than-expected cost performance in the third quarter was due to the timing of expenses that shifted into the fourth quarter.
Demand, Bookings and Vacation Platform
Since the last earnings call, booking volumes have increased in the mid-teens across all major channels, with bookings for 2027 sailings up in the high teens, demonstrating strong demand as booking activity builds for 2027.
The company continues to see strong engagement across the vacation journey. Third quarter pre-cruise and onboard revenue rates were ahead of prior year, and fourth quarter pre-cruise revenue rates are also booked ahead of last year. The company's expanding range of products and services, together with its technology capabilities, is enabling more relevant and personalized engagement by connecting guests with the right experiences at the right time.
Fourth Quarter 2026
In line with the company's prior expectation, Net Yields are expected to be 4.4% to 4.9% as-reported and 4.2% to 4.7% in Constant Currency as compared to 2025. Net Yield growth is driven by strong demand, a more favorable year-over-year comparison, deployment mix, and the timing of dry docks. Total revenue is expected to grow 9%.
NCC, excluding Fuel, per APCD is expected to decrease 1.5% to 1.0% as-reported and 1.4% to 0.9% in Constant Currency as compared to 2025.
Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects fourth quarter Adjusted EPS to be in the range of $3.48 to $3.58.
Fuel Expense
Bunker pricing, net of hedging, for the third quarter was $778 per metric ton and consumption was 446,000 metric tons.
The company does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on current fuel prices, the company has included $379 million of fuel expense in its fourth quarter guidance, which is 58% hedged via swaps at a forecasted consumption of 463,000 metric tons.
Forecasted consumption is 58%, 53%, 29%, and 14% hedged via swaps for 2026, 2027, 2028, and 2029 respectively. The annual average cost per metric ton of the hedge portfolio is approximately $471, $405, $424, and $451 for 2026, 2027, 2028, and 2029 respectively.
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