Royal Caribbean Cruises Ltd. (RCL Quick QuoteRCL - Free Report) delivered a strong start to 2026, with first-quarter results reflecting robust demand and disciplined execution. Earnings outpaced expectations, supported by double-digit revenue growth and better-than-anticipated cost control. Management highlighted that performance was driven by sustained consumer appetite for travel, particularly experience-led vacations, alongside solid onboard spending and healthy booking volumes.

A key highlight was the company’s record “Wave season,” which underscored strong forward bookings at attractive pricing. Guest engagement remained elevated, with repeat customers and younger demographics contributing meaningfully to volume growth. Net yields also improved, aided by pricing strength across major itineraries and continued momentum in pre-cruise spending.

Operational execution stood out as a major tailwind. Cost discipline, efficiency initiatives and favorable joint venture performance boosted margins, while EBITDA expanded significantly year over year. At the same time, the company maintained a strong balance sheet and generated solid cash flows, enabling share buybacks and dividends.

That said, management acknowledged some near-term headwinds. Geopolitical tensions impacted select regions, particularly Mediterranean itineraries and higher fuel costs remain a pressure point. However, booking trends have already begun to stabilize and demand across most products continues to track well.

Looking ahead, the company expects another year of double-digit earnings and revenue growth, supported by a strong booking position and resilient consumer demand. Overall, the quarter reinforces Royal Caribbean’s ability to execute effectively while capitalizing on favorable travel trends, positioning it well for sustained growth. (Read more: Royal Caribbean Q1 Earnings & Revenues Beat Estimates, Stock Up)

Royal Caribbean’s Outlook Targets Continued 2026 Growth

For the second quarter of 2026, the company guided adjusted earnings per share of $3.83-$3.93. It noted that the itinerary mix and the timing of drydocks are among the factors shaping the quarterly outlook.

For full-year 2026, Royal Caribbean expects adjusted earnings per share of $17.10-$17.50. The company also expects 2026 revenues to grow roughly 10% year over year. It anticipates capital expenditures of approximately $5 billion, aligned with new ship deliveries and destination investments intended to support its longer-term growth strategy.

RCL’s Zacks Rank & Key Picks

Royal Caribbean currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Zacks Consumer Discretionary sector are GDEV Inc. (GDEV Quick QuoteGDEV - Free Report) , Accel Entertainment, Inc. (ACEL Quick QuoteACEL - Free Report) and Take-Two Interactive Software, Inc. (TTWO Quick QuoteTTWO - Free Report) .

GDEV presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter earnings surprise of 262.7%, on average. The consensus estimate for GDEV’s 2026 sales and EPS implies growth of 6.4% and 23.8%, respectively, from the year-ago levels.

Accel Entertainment carries a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 23.4%, on average.

The consensus estimate for Accel Entertainment’s 2026 sales and EPS implies growth of 5.1% and 15%, respectively, from the year-ago levels.

Take-Two Interactive carries a Zacks Rank #2 at present. The company delivered a trailing four-quarter earnings surprise of 58.9%, on average.

The Zacks Consensus Estimate for Take-Two Interactive’s 2026 sales and EPS indicates growth of 18.2% and 90.7%, respectively, from the year-ago levels.