Royal Caribbean Shares Sink Over 9% After Q4 Profit Forecast Misses Estimates
- CEO Jason Liberty said the company noted a pullback from North America, mainly in Canada, in the early and mid-part of the year.
- The company expects fourth-quarter adjusted earnings per share (EPS) between $2.74 and $2.79, compared with Wall Street estimates of $2.90, according to data compiled by Fiscal AI.
- However, Liberty noted that the demand from Europe this summer was particularly strong, adding that their focus on booking for 2026 is now even stronger.
Royal Caribbean (RCL) shares fell over 9% in afternoon trading and hit a four-month low after the company’s fourth-quarter (Q4) profit forecast came in below Wall Street estimates due to higher costs, despite CEO Jason Liberty noting that consumers were prioritising experiences.
The company expects fourth-quarter adjusted earnings per share (EPS) between $2.74 and $2.79, compared with Wall Street estimates of $2.90, according to data compiled by Fiscal AI.
Liberty said during a post-earnings call that consumers were making room “in their budgets for meaningful vacations.” He added that even though the broader consumer environment has normalized from the exceptional strength over the past two years, demand for experiences and leisure travel remains intact.
Retail sentiment on Royal Caribbean improved to ‘extremely bullish’ from ‘bullish’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
Summer Cruise Demand
Liberty noted that demand from Europe this summer was really strong, and their focus now to book for 2026 is actually stronger. “We didn’t have a lot of inventory left in 2025 for the European consumers who typically book a little bit later. So, they’re getting a little bit ahead of that curve, and that’s really encouraging,” he added.
He said that, however, the company noted a pullback from North America, mainly in Canada, in the early and mid-part of the year. “But we’ve now seen that normalize,” Liberty said.
RCL’s Q3 Results
The company’s third-quarter (Q3) revenue came in at $5.14 billion, compared with expectations of $5.17 billion. Royal Caribbean’s adjusted EPS were $5.75, topping estimates of $5.68.
Executives on the call said that Q3 results exceeded the company’s expectations, driven primarily by strong close-in demand for vacation offerings and lower costs. The company’s capacity increased 3% during the quarter.
Shares of Royal Caribbean have gained over 38% in the last 12 months.
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