Royal Caribbean Cruises Through Q1 As Demand And Pricing Remains High

Royal Caribbean Cruises Ltd RCL reported first-quarter 2024 revenue growth of $3.73 billion, a 29.2% year-over-year increase, beating the analyst consensus estimate of $3.7 billion.

Passenger ticket revenues rose 34% Y/Y to $2.54 billion versus last year.

Total cruise operating expenses were $2.06 billion versus $1.79 billion a year ago. 

Gross Cruise Costs per Available Passenger Cruise Days (APCD) increased 5.1%.

Gross margin yields increased 60.3% as-reported, and net yields increased 19.3% in constant currency versus first-quarter 2024.

Operating income for the quarter jumped 175% to $750 million, with an operating margin of 20.1%.

The occupancy rate in first-quarter was 107% versus 102.1% last year.

Royal Caribbean held $437 million in cash and equivalents as of March 31, 2024.

Adjusted EPS of $1.35 beat the consensus estimate of $1.33.

As of March 31, the group’s customer deposit balance was $6 billion.  

Royal Caribbean CEO Jason Liberty called it “a great start to the year,” citing growing demand for the company’s “outperformance in the first quarter, a further increase of full year earnings guidance, and 60% expected earnings growth year over year.”

Outlook: Royal Caribbean expects FY24 net yields to increase 9% to 10% in constant currency vs. 2023.

RCL raised its FY24 adjusted EPS guidance from $9.50 – $9.70 to $10.70 – $10.90 against the consensus of $10.06.

The company sees second-quarter net yields to increase 10.20% to 10.70% in constant currency. RCL sees adjusted EPS of $2.65 – $2.75.

Price Action: RCL shares are trading higher by 1.56% at $138.70 at the last check Thursday.

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