Recently, Royal Caribbean Group (NYSE: RCL) announced its first-quarter 2026 financial results, with earnings per share of $3.48 and adjusted earnings per share of $3.60. The company’s performance exceeded expectations, driven by stronger revenue performance, effective cost control, and outstanding results from joint ventures.
In the first quarter, the company returned approximately $1.1 billion to shareholders through $836 million in share repurchases and $270 million in dividend payments. Following a record-breaking “WAVE” booking season, the company’s portfolio of vacation products continues to demonstrate strong market demand. Despite a temporary slowdown in bookings for Mediterranean and Mexican West Coast itineraries in March and early April due to geopolitical factors, demand has now strongly rebounded and shows growth trends higher than the same period last year. The company currently expects full-year adjusted earnings per share to be between $17.10 and $17.50. The revised guidance reflects multiple factors: increased fuel costs based on current retail oil prices, the impact of geopolitical events on TUI Cruises’ Middle East itineraries, lower non-fuel costs, and the beneficial effects of recent share repurchases.
Jason Liberty, President and CEO of Royal Caribbean Group, stated: “The strong first-quarter results and record-breaking WAVE booking season fully demonstrate the extraordinary appeal and highly competitive value proposition of our trusted brands, industry-leading fleet, and destinations. Current market demand remains robust, and we continue to focus on responsibly creating exceptional vacations, accelerating revenue growth and meticulously controlling costs while continuously investing in the future to strengthen our differentiation. Based on our guests’ preference for our leading brands and expanding product portfolio, as well as the company’s solid booking position, industry-leading margins, and strong balance sheet, we expect to achieve double-digit growth in both revenue and earnings again this year.”
Liberty added: “We are steadily advancing the implementation of innovative projects and continuously expanding our vacation ecosystem, further strengthening our long-term growth trajectory. With the recent opening of the Royal Beach Club Santorini, the upcoming delivery of Legend of the Seas, and the latest order for the sixth and seventh ships in the Icon Class, our product matrix is continuously expanding. Particularly noteworthy is that we have taken a key step in enhancing our loyalty ecosystem—the recently launched Royal ONE credit card is an important initiative to deepen guest engagement and connection, helping the company capture a larger share of the vast and growing global vacation market.”
In the first quarter, Royal Caribbean’s total revenue reached $4.5 billion, an increase of 11% year-over-year. The occupancy rate for the first quarter was 109%. Gross margin yield increased by 6.9% (as reported), and net yield increased by 2.0% on a constant currency basis (3.6% as reported). Total cruise costs per Available Passenger Cruise Day decreased by 1.0% as reported. Net cruise costs (excluding fuel) decreased by 0.5% on a constant currency basis (increased by 0.6% as reported).
Net income for the first quarter of 2026 was $900 million, or $3.48 per share. Net income for the same period last year was $700 million, or $2.70 per share. Adjusted net income for the first quarter of 2026 was $1.0 billion, or $3.60 per share, compared to adjusted net income of $700 million, or $2.71 per share, in the same period last year. The company’s total revenue for the quarter was $4.5 billion, and adjusted EBITDA was $1.7 billion.
In the first quarter of 2026, Royal Caribbean Group’s capacity increased by 8% year-over-year, providing memorable vacation experiences for 2.5 million guests, an increase of 12% compared to the same period last year. The company’s total revenue increased by 11% year-over-year. Compared to the first quarter of 2025, gross margin yield increased by 6.9% (as reported), and net yield increased by 2.0% on a constant currency basis (3.6% as reported). The occupancy rate for the quarter was 109%. Net yield growth exceeded expectations, driven by strong close-in booking demand and higher onboard revenue.
Compared to the first quarter of 2025, total cruise costs per Available Passenger Cruise Day decreased by 1.0% as reported, and net cruise costs (excluding fuel) decreased by 0.5% on a constant currency basis (increased by 0.6% as reported).
The price of fuel (net of hedging) for the first quarter was $613 per metric ton, with consumption of 432,000 metric tons. The company does not forecast fuel prices; its fuel cost estimates are based on current bunker prices (net of hedging). Based on current fuel prices, the company includes fuel expenses of $346 million in its second-quarter forecast, corresponding to an estimated consumption of 423,000 metric tons, of which 60% is hedged via swap contracts. For the full year, based on current bunker prices (net of hedging), the company expects fuel expenses to be approximately $1.3 billion; however, based on the forward price curve, fuel expenses would be approximately 4% lower.
Hedging percentages for estimated consumption in 2026, 2027, 2028, and 2029 are 59%, 49%, 30%, and 15%, respectively. The corresponding average annual costs of the hedging portfolios are approximately $475, $408, $424, and $451 per metric ton, respectively.
Royal Caribbean noted that overall market demand remains strong. Bookings in April continued to exceed levels from the same period last year, with close-in bookings remaining robust. Consequently, the company’s booking position is at record price levels, while booking volumes remain within historical normal ranges. At the end of the first quarter, bookings for high-yield Mediterranean itineraries, which started the year with exceptionally strong momentum, slowed due to recent geopolitical tensions, partly attributable to higher air travel costs, airline capacity reductions, and flight operation disruptions. In recent weeks, bookings have rebounded given the limited remaining available cabin inventory for Mediterranean itineraries. These factors will primarily impact the second and third quarters, as these periods have a higher proportion of high-yield itineraries in the overall deployment. Similarly, bookings for Mexican West Coast itineraries also slowed during the quarter due to specific geopolitical factors.
Onboard revenue trends remain robust, with onboard spending consistently exceeding levels from the same period last year. This growth is primarily driven by guests’ increasing demand for onboard and destination experiences, as well as the company’s expanding onboard and destination product offerings. Additionally, more efficient and precise engagement—ensuring the right experiences are matched to the right guests—has further strengthened the onboard spending growth trend.
Naftali Holtz, Chief Financial Officer of Royal Caribbean Group, stated: “Even in the face of global events, consumers continue to prioritize experiences, and demand for our vacation products remains healthy. Travel remains a priority for consumers; at the same time, guests are becoming more discerning in their choice of travel methods and destinations, placing greater emphasis on value for money. This trend aligns perfectly with the value proposition of our products, which is the core reason we have consistently performed well in past uncertain environments.”
Looking ahead to the second quarter, Royal Caribbean expects net yield for the second quarter to increase by approximately 0.2% on a constant currency basis (0.9% as reported) compared to the same period in 2025. The second quarter has a higher proportion of high-yield itineraries affected by recent global events, and these dynamics will also impact the third quarter. Net cruise costs (excluding fuel) per Available Passenger Cruise Day are expected to increase by 4.6% to 5.1% on a constant currency basis (4.9% to 5.4% as reported). The cost increase in the second quarter is primarily driven by a significant increase in drydock days compared to the same period last year, as well as higher crew deployment costs.
Based on current fuel prices, interest rates, exchange rates, and the aforementioned factors, the company expects adjusted earnings per share for the second quarter to be between $3.83 and $3.93. Excluding the impact of geopolitical events and other factors affecting year-over-year comparability (including changes in the timing of drydock schedules), the growth rate for adjusted earnings per share in the second quarter would be approximately 11%.
Royal Caribbean expects full-year 2026 revenue to increase by approximately 10% year-over-year. Due to recent geopolitical factors (which have impacted Mediterranean and Mexican West Coast itineraries), net yield is expected to increase by 1.5% to 2.5% on a constant currency basis (2.3% to 3.3% as reported). Net cruise costs (excluding fuel) per Available Passenger Cruise Day are expected to be approximately flat on a constant currency basis, increasing by approximately 0.5% as reported.
Based on current retail market prices and net of hedging gains, fuel costs are expected to be approximately $1.3 billion, representing an increase of $0.62 per share compared to previous expectations. For the remaining fuel requirements in 2026, the company has locked in hedges for 59% of consumption, with hedge prices lower than current market prices.
Adjusted earnings per share are expected to be between $17.10 and $17.50, an increase of 11% year-over-year. This expectation implies a compound annual growth rate of 21% for earnings per share during the first two years of the company’s “Perfecta Plan.” The plan aims to achieve a 20% compound annual growth rate in earnings per share from 2024 to 2027 and to increase the return on invested capital to the high end of the 15% to 19% range by 2027.
