Royal Caribbean reported strong Q1 2026 results with EPS of $3.60 and net yield growth of 2%, beating expectations. Management maintained its full-year EPS guidance despite a $0.74 per share fuel headwind and lowered its net yield outlook to 1.5%-2.5% due to geopolitical events affecting Mediterranean and West Coast Mexico itineraries. The company emphasized strong demand, record wave season, and a healthy consumer, with 2026 earnings expected to grow double digits. Q1 2026 EPS: $3.60, 37 cents above guidance; revenue up 11%.
Royal Caribbean reported strong Q1 2026 results with EPS of $3.60 and net yield growth of 2%, beating expectations. Management maintained its full-year EPS guidance despite a $0.74 per share fuel headwind and lowered its net yield outlook to 1.5%-2.5% due to geopolitical events affecting Mediterranean and West Coast Mexico itineraries. The company emphasized strong demand, record wave season, and a healthy consumer, with 2026 earnings expected to grow double digits. Q1 2026 EPS: $3.60, 37 cents above guidance; revenue up 11%.
Management expressed strong confidence in demand, record Wave season, and forward momentum, while acknowledging short-term regional setbacks but emphasizing they have 'turned the corner'.
Demand for Mediterranean itineraries rebounding after short-term moderation. Management expressed strong confidence in demand, record Wave season, and forward momentum, while acknowledging short-term regional setbacks but emphasizing they have 'turned the corner'.
Full-year 2026 EPS guidance maintained at $17.10-$17.50, despite a $0.74/share fuel headwind.
Full-year net yield guidance lowered to 1.5%-2.5% due to geopolitical impacts on Mediterranean and West Coast Mexico.
Management discussed the integration of AI in the business, emphasizing its role in improving operations, guest personalization, and creating a competitive moat. They highlighted that AI and technology are shaping how guests book and plan vacations, driving digital engagement and pre-cruise onboard revenue.
Demand for Mediterranean itineraries rebounding after short-term moderation. Management expressed strong confidence in demand, record Wave season, and forward momentum, while acknowledging short-term regional setbacks but emphasizing they have 'turned the corner'.
The company is investing in new ships (Icon 6, Icon 7, Legend of the Seas) and destination experiences (Royal Beach Club in Santorini, Cozumel, Perfect Day Mexico, Costa Maya). These investments are expected to be accretive to yield growth and support expansion in markets like Texas, while maintaining moderate capacity growth.
Management expressed strong confidence in demand, record Wave season, and forward momentum, while acknowledging short-term regional setbacks but emphasizing they have 'turned the corner'.
“Fuel prices at current spot levels are expected to increase costs by roughly 62 cents per share this year.”
“The softer booking trends lasted for a few weeks, but we have now turned a corner and are experiencing improved demand”
“driven by really, you know, two things. One of it was people's concern about vacation disruption. But more importantly is cost of air went up by more than 40%”
“we experienced some disruption in demand for select West Coast Mexico itineraries, driven by travel disruption concerns”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $17.10–$17.50 | $17.30 | MAINTAINED |
| EPS | FY2026 Q2 | $3.83–$3.93 | $3.88 | GUIDED |
| Revenue | FY2026 | 10% | 10% | GUIDED |
| RevenueNET_YIELD | FY2026 | 1.5%–2.5% | 2% | LOWERED |
| RevenueNET_YIELD | FY2026 Q2 | 0.2% | 0.2% | MAINTAINED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2025 Q4 | EPS | FY2026 Q1 | $3.18–$3.28 | $3.60 | Met / beat |
Airfare to Europe spiked by over 40% initially due to conflict, then moderated to +15%, impacting demand from North American cruisers. — High airfares temporarily dampen North American demand for European cruises; airlines' pricing power influences cruise destination demand.
Great. Thanks for taking my question. I just wanted to circle back on the third quarter and the MED, and just maybe if you could put a bit of a finer point on it. How much do you have left to book at this point in the year? How much damage do you think was done over the last few weeks? And what are you sort of baking into your forward guidance in terms of how the conflict plays out and how bookings play out from here?
Yeah, well, Matt, what I would first start off is I don't think I would describe the book. We had a record wave period, so I wouldn't describe it as damage. I would probably describe it as. You know, the booking trends that we saw for the Mediterranean, you know, in the early parts of WAVE and when we gave guidance and even to the point where, you know, we, of course, we put all that into the 10K, all of our knowledge, was just at levels that we had not seen before. And it moderated as we got out of the month of February with the activity happening in the Middle East, driven by really, you know, two things. One of it was people's concern about vacation disruption. But more importantly is cost of air went up by more than 40%. It's now moderated down to like 15%. And so it was getting to a point where cost of a flight was more than the cruise. But that kind of settled out. And of course, we did have to address that demand. But where we sit there today, we're at the end of April. There's very little inventory left to sell for the quarter, and there's still very little inventory to sell for the third quarter. But, of course, we are continuing to actively manage this environment. And if we see things continue to accelerate, that could be a positive light for this quarter and Q3.
Fuel cost headwind of $0.74 per share for 2026 due to Middle East conflict, with the company 60% hedged but spot prices rising. — Significant fuel cost inflation impacts operating margins and hedges at current levels are insufficient to offset it.
… standpoint, two of our TUI cruise ships sailing in the Middle East region were directly impacted by the conflict and therefore had to temporarily pause operations. Both ships have since safely repositioned out of the area and are heading to the Mediterranean where they will welcome guests beginning in the middle of May. The most notable financial impact from the Middle East conflict has been on fuel costs. While we are approximately 60% hedged for 2026, fuel prices at current spot levels are expected to increase costs by roughly 62 cents per share this year. In addition to fuel, we saw a short-term moderation in demand trends for 2026 for high-yielding Mediterranean sailings, which modestly impacted our outlook for the upcoming summer season. The softer booking trends lasted for a few weeks, but we have now turned a corner and are experiencing improved demand for the limited inventory we have remaining for Q2 and Q3 sailings. Lastly, we experienced some disruption in demand for select West Coast Mexico itineraries, driven by travel disruption concerns during the quarter. Demand trends for other products remain largely consistent with our expectations. Overall, our diversified …
Fuel cost headwind of $0.74 per share for 2026 due to Middle East conflict, with the company 60% hedged but spot prices rising.
… standpoint, two of our TUI cruise ships sailing in the Middle East region were directly impacted by the conflict and therefore had to temporarily pause operations. Both ships have since safely repositioned out of the area and are heading to the Mediterranean where they will welcome guests beginning in the middle of May. The most notable financial impact from the Middle East conflict has been on fuel costs. While we are approximately 60% hedged for 2026, fuel prices at current spot levels are expected to increase costs by roughly 62 cents per share this year. In addition to fuel, we saw a short-term moderation in demand trends for 2026 for high-yielding Mediterranean sailings, which modestly impacted our outlook for the upcoming summer season. The softer booking trends lasted for a few weeks, but we have now turned a corner and are experiencing improved demand for the limited inventory we have remaining for Q2 and Q3 sailings. Lastly, we experienced some disruption in demand for select West Coast Mexico itineraries, driven by travel disruption concerns during the quarter. Demand trends for other products remain largely consistent with our expectations. Overall, our diversified …