Royal Caribbean Q3 Earnings Sail Higher on Robust Bookings & Yield

Royal Caribbean Cruises Ltd. RCL delivered another strong performance in the third quarter of 2025, underscoring the resilience of cruise demand and the strength of its premium vacation ecosystem. 

The company posted adjusted earnings per share of $5.75, up 11% from the prior year and beat the Zacks Consensus Estimate of $5.68. Revenues came in at $5.14 billion, reflecting a 5% year-over-year increase. However, the figure missed the consensus estimate of $5.17 billion.

The earnings beat was largely fueled by strong close-in bookings and steady growth in yields. Net yields rose 2.4% in constant currency, surpassing guidance thanks to demand across key itineraries and record guest satisfaction. Capacity expanded 3%, enabling the company to deliver nearly 2.5 million vacations during the quarter, a 7% jump from last year. Importantly, onboard spending momentum remained robust, with a record share of purchases booked pre-cruise and almost 90% of those transactions completed through digital channels.

Royal Caribbean’s strategy of investing in new ships and exclusive destinations continues to pay off. CEO Jason Liberty highlighted the expansion of its land-based portfolio, including the newly announced Royal Beach Club in Santorini, which will grow the group’s destination network from two to eight by 2028. Alongside game-changing vessels such as Celebrity Xcel and Icon-class ships, these initiatives are designed to strengthen loyalty and drive sustained yield growth.

Looking ahead, management raised full-year earnings guidance to a range of $15.58 to $15.63 per share, representing a 32% annual increase. Despite minor headwinds from weather disruptions and the temporary closure of Labadee, the company expects continued yield gains and record booked load factors into 2026.

With strong cash generation, disciplined cost control and unwavering consumer appetite for premium travel, Royal Caribbean remains firmly on course to sail into its next phase of growth.

RCL’s Q4 Outlook

For the fourth quarter of 2025, Royal Caribbean expects depreciation and amortization expenses to be in the range of $445-$455 million. Net interest expenses (excluding loss on extinguishment of debt) are expected to be between $245 million and $255 million. Management estimates adjusted EPS to be in the band of $2.74-$2.79.

The company expects net yields to increase in the band of 2.6-3.1% on a reported basis and 2.2-2.7% at cc year over year. Net cruise costs, excluding fuel, per APCD are expected to decline between 5.7% and 6.2% on a reported basis and in the range of 6.1-6.6% at cc.

RCL’s Zacks Rank & Key Picks

Royal Caribbean currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Consumer Discretionary sector are Norwegian Cruise Line Holdings Ltd. NCLH, Carnival Corporation & plc CCL and Lucky Strike Entertainment Corporation LUCK.

Norwegian Cruise Line flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. NCLH stock has declined 8.7% year to date. The Zacks Consensus Estimate for Norwegian Cruise’s 2025 sales and EPS indicates growth of 6% and 15.4%, respectively, from the year-ago period’s levels.

Carnival sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 169.8%, on average. Carnival stock has gained 18% year to date.

The Zacks Consensus Estimate for Carnival’s fiscal 2025 sales and EPS indicates growth of 6.5% and 51.4%, respectively, from the prior-year levels.

Lucky Strike Entertainment has a Zacks Rank of 2 (Buy) at present. LUCK stock has declined 28% in the past year.

The Zacks Consensus Estimate for Lucky Strike Entertainment's 2025 sales and EPS indicates growth of 6.4% and 107.7%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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