Royal Caribbean Raises 2026 Outlook as Q3 Adjusted EPS Hits $6.57

Royal Caribbean Group reported third-quarter adjusted EPS of $6.57 and raised its full-year 2026 guidance to $17.85–$17.95, beating its own prior expectations on strong close-in demand in Europe and the Caribbean and on cost timing that shifted expenses into the fourth quarter.

Net income for the quarter was $1.7 billion, or $6.45 per share, versus $1.6 billion, or $5.74 per share, a year earlier. Adjusted net income reached $1.8 billion against $1.6 billion in the third quarter of 2025. Total revenue rose 9% year over year to $5.6 billion, and adjusted EBITDA came in at $2.5 billion.

The company carried 2.7 million guests in the quarter, up 9% year over year, on capacity growth of 8%. Load factor hit 112%.

What do the yield numbers show?

Net Yields (revenue per available passenger cruise day) increased 0.9% as-reported and 0.6% in constant currency, exceeding guidance on better-than-expected close-in demand. Gross Margin Yields fell 0.8% as-reported.

On the cost side, Gross Cruise Costs per APCD declined 0.7% as-reported. Net Cruise Costs excluding fuel fell 1.9% as-reported and 1.8% in constant currency — though the company attributed the beat to expense timing that pushed costs into the fourth quarter rather than structural savings.

"Our third quarter results reflect continued strong consumer demand for our vacation experiences and the accelerated momentum across our industry leading brands," said Jason Liberty, chairman and CEO of Royal Caribbean Group.

How does the Sandals deal reshape the platform?

The results landed a month after Royal Caribbean announced an agreement to acquire a 50% interest in Sandals and Beaches Resorts, its entry into the all-inclusive resort category. The portfolio covers 18 operating resorts across the Caribbean, three resorts in development, and more than 1,000 acres of undeveloped land, including parcels adjacent to existing properties.

The strategic logic rests on overlapping customer bases: roughly 30% of Royal Caribbean guests also take all-inclusive vacations, while a similar share of Sandals and Beaches guests also cruise. The brands will keep their identity, operating leadership and Caribbean character under the partnership.

"Sandals and Beaches Resorts extend our platform into an attractive adjacent category, unlocking more ways to deliver on that mission," Liberty said. He cited the pairing of Sandals' Caribbean hospitality expertise with Royal Caribbean's global commercial reach, loyalty and technology capabilities as a route to new guests, higher vacation frequency and synergies.

The transaction is expected to close in early 2027, subject to regulatory approvals and customary conditions. Royal Caribbean expects its share of Sandals earnings to be immediately accretive, accounted under the equity method with a one-quarter reporting lag. Contribution to 2027 results depends on closing timing and will be folded into guidance after the deal completes.

What is the forward demand picture?

Since the last earnings call, booking volumes have risen in the mid-teens across all major channels. Bookings for 2027 sailings are up in the high teens, ahead of historical pacing at higher rates. Third-quarter pre-cruise and onboard revenue rates ran ahead of the prior year, and fourth-quarter pre-cruise revenue rates are already booked ahead of last year.

2027 is the final year of the company's Perfecta target period, and Liberty said the business is running ahead of initial expectations. Based on the forward fuel curve, the company remains on track for 20% adjusted EPS compound annual growth from 2024 through 2027 — what Liberty called "a $20-handle in 2027" — and is already above its ROIC (return on invested capital) target.

What does the fourth quarter hold?

Fourth-quarter net yields are guided to 4.4%–4.9% as-reported and 4.2%–4.7% in constant currency, driven by demand, a favorable comparison, deployment mix and dry dock timing. NCC excluding fuel per APCD is expected to decline 1.5%–1.0% as-reported. Adjusted EPS guidance for the quarter sits at $3.48–$3.58, based on current fuel, interest rate and currency assumptions.

For the full year, revenue is expected to grow 9%, with net yields up approximately 2.7% as-reported — a raised outlook partially offset by higher-than-anticipated fuel costs at current at-the-pump rates and unfavorable currency exchange rates.