Royal Caribbean sees record bookings as demand for experiences and travel grow

By Tomi Kilgore

Stock jumps briefly into record territory, then pares gains

There were a lot of records associated with Royal Caribbean Group's first-quarter report released Thursday, including ticket pricing and bookings, and briefly for the stock, as demand for cruises continued to increase.

"Wow, what a great start to the year!," said Chief Executive Jason Liberty.

"The acceleration of demand is also translating into higher revenue and earnings expectations for the balance of the year," Liberty said on the post-earnings call with analysts, according to an AlphaSense transcript.

The stock (RCL) shot up as much as 3.1% moments after the opening bell to an intraday high of $140.94, which was above the April 1 record closing price of $140.56, before paring gains. It was up 0.5% in afternoon trading.

It has rallied 7.6% amid a five-day win streak.

"Stronger-than-anticipated demand led to a record Wave season and continued strength in bookings in April from both a volume and pricing standpoint," the company said. Wave season is when cruise promotions peak, during the first quarter of the calendar year.

The company swung to net income of $360 million, or $1.35 a share, after a loss of $48 million, or 19 cents a share, in the same period a year ago. Excluding nonrecurring items, such as losses on extinguishment of debt, adjusted earnings per share of $1.77 beat the FactSet consensus of $1.33.

Revenue grew 29.2% to $3.73 billion, above the FactSet consensus of $3.69 billion, as passenger ticket revenue jumped 34% to $2.54 billion and onboard and other revenue increased 19.9% to $1.19 billion.

"Consumer preferences continue to shift towards spend on experiences, particularly priority for travel," Liberty said. "This is evident as the year-over-year growth and spend on experience is double that of spend on goods."

Load factors for the first quarter increased five percentage points to 107%. A reading above 100% indicates that some cabins had three or more passengers.

"In addition to record ticket pricing, consumer spending onboard and pre-cruise purchases continue to exceed prior years driven by greater participation at higher prices," the company said.

For 2024, the company raised its adjusted EPS guidance range to $10.70 to $10.90 from $9.50 to $9.70. That compares with the current FactSet consensus of $10.

The stock has gained 6.1% year to date, while the S&P 500 index has advanced 5.9%.

-Tomi Kilgore

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04-25-24 1424ET

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