Royal Caribbean Cruises Ltd. (RCL Quick QuoteRCL - Free Report) emphasized accelerating bookings, resilient consumer spending and an expanding vacation platform during its third-quarter 2026 earnings call. Management raised the annual earnings outlook while maintaining confidence in its 2027 financial targets.

The discussion centered on stronger advance bookings, the planned Sandals and Beaches Resorts investment and continued expansion beyond traditional cruising, despite fuel costs and currency pressures.

Third-quarter adjusted earnings of $6.57 per share exceeded the Zacks Consensus Estimate of $6.38. Revenues reached $5.59 billion, beating the consensus mark of $5.58 billion, supported by stronger close-in demand in Europe and the Caribbean.

Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise

Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote

RCL Sees Stronger Bookings and Consumer Demand

Chairman and CEO Jason Liberty said booking volumes increased in the mid-teens year over year since the previous earnings call, while bookings for 2027 sailings rose in the high teens. Booked positions for both years remain ahead of prior-year levels at record rates.

Liberty attributed the momentum to differentiated ships, destinations and stronger guest engagement. Nearly half of guests this year were repeat customers, while shorter intervals between cruises reflected increasing vacation frequency.

Royal Caribbean Raises 2026 Earnings Outlook

Executive vice president and CFO Naftali Holtz guided full-year adjusted earnings to $17.85-$17.95 per share, reflecting stronger third-quarter performance partially offset by higher fuel expenses and unfavorable currency movements.

Management expects annual revenues to increase 9%, supported by 6.6% capacity growth and approximately 2.1% constant-currency net yield growth. Net cruise costs excluding fuel should remain approximately flat.

For the fourth quarter, Holtz projected adjusted earnings of $3.48-$3.58 per share. Constant-currency net yields should increase 4.2-4.7%, benefiting from demand, deployment mix, favorable comparisons and drydock timing.

RCL Maintains Confidence in 2027 Targets

Liberty reaffirmed the company's Perfecta program objective of 20% compound annual adjusted earnings growth from 2024 through 2027, targeting earnings above $20 per share. Management has already exceeded its return-on-invested-capital target.

Holtz expects 2027 capacity to increase 4.5%, supported by new ships and fewer drydock days. Yield growth should favor the second half, with approximately 200 basis points of structural headwinds affecting the first quarter.

During questioning from Stifel, Liberty clarified that the 2027 earnings objective excludes potential benefits from Sandals, share repurchases and debt refinancing. The target remains based on the underlying business and current forward fuel assumptions.

Royal Caribbean Expands Into All-Inclusive Resorts

Liberty outlined the planned acquisition of a 50% stake in Sandals and Beaches Resorts for approximately $3 billion, extending Royal Caribbean's vacation platform into Caribbean all-inclusive resorts.

The portfolio includes 18 operating resorts, three developments and more than 1,000 acres of undeveloped land. Liberty identified several hundred million dollars in potential synergies through distribution, loyalty integration, revenue management and procurement.

Responding to UBS, Liberty explained that opportunities extend beyond the Caribbean, although regional expansion remains the immediate priority. Holtz added that the investment should be immediately accretive, but its 2027 earnings contribution will be immaterial and dependent on closing timing.

RCL Addresses Booking Patterns and Expansion

During Barclays' questioning about shorter booking windows, Liberty rejected the implication that close-in strength reflected weakening consumers. He attributed the pattern partly to shorter itineraries and younger travelers taking more frequent vacations.

Liberty also highlighted stronger-than-anticipated onboard spending. Management viewed customers' willingness to spend more on vacations as evidence of continued demand resilience despite geopolitical uncertainty.

Addressing HSBC's questions about international opportunities, Liberty highlighted Asia-Pacific expansion. Royal Caribbean brand president and CEO Michael Bayley pointed to the planned Lelepa beach club and additional Australian deployment as examples of regional investment.

Royal Caribbean Focuses on Disciplined Growth

Management emphasized maintaining cost discipline while funding new ships, destinations and technology. Holtz reported $7.4 billion in liquidity and leverage below three times, supporting investment-grade balance-sheet objectives.

Liberty maintained a confident outlook centered on customer loyalty, vacation frequency and broader product offerings. Fuel prices, currency movements and execution of expansion initiatives remain important considerations as the company approaches 2027.

What RCL's Zacks Rank and Style Scores Indicate

RCL currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term earnings-revision outlook. The stock’s Value Score of C and Growth Score of C reflect middle-tier characteristics, while its Momentum Score of F indicates comparatively weak price-momentum characteristics.

The stock's VGM Score of D reflects an unfavorable combined assessment of value, growth and momentum. This combination falls outside the stronger Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks with A or B Style Scores historically favored by the methodology. The Zacks Rank remains subject to change as analysts revise earnings estimates following the latest quarterly results. You can see the complete list of today’s Zacks #1 Rank stocks here.