Carnival CEO Says Vacation Demand Is Defying Economic Angst: ‘Vacations Are Sacrosanct’

Carnival Corp. (NYSE:CCL) stock is trading higher Tuesday after the cruise operator reported better-than-expected third-quarter results and raised its fiscal 2026 adjusted EPS outlook above estimates. The company also pointed to record booking trends for 2027.

During the earnings call, CEO Josh Weinstein said Carnival is seeing resilient vacation demand despite weaker consumer confidence, higher gasoline prices and broader inflation pressures. He said booking momentum accelerated through July and August, adding that “vacations are sacrosanct” and consumers continue to prioritize travel “in good times and in bad.”

Earnings Beat Estimates

Carnival reported adjusted EPS of $1.43, beating the $1.36 analyst estimate.

Revenue rose 3.5% year over year to $8.44 billion, beating the $8.30 billion estimate.

GAAP diluted EPS increased to $1.40 from $1.33 a year earlier. Adjusted EBITDA was nearly unchanged at $2.99 billion.

Net income attributable to Carnival rose to $1.92 billion from $1.85 billion.

Passenger-ticket revenue increased to $5.53 billion from $5.43 billion. Onboard and other revenue climbed to $2.91 billion from $2.72 billion.

Operating income declined to $2.22 billion from $2.27 billion.

Yields and Bookings Stay Strong

Constant-currency net yields increased 2.4%, more than one percentage point above Carnival’s June guidance.

Adjusted cruise costs excluding fuel per available lower berth day rose 1.8%, also about one percentage point better than June guidance.

Gross-margin yields declined 1.3% as fuel prices increased. Meanwhile, fuel consumption per available lower berth day improved 3.8%.

Carnival carried 3.9 million passengers, up from 3.8 million a year earlier. Occupancy edged up to 111.8% from 111.7%.

Customer deposits reached a third-quarter record of $7.6 billion, $500 million above the prior-year record.

Carnival said 2027 booked occupancy and pricing are at record levels. Bookings for 2028 are also running ahead of last year’s levels on both occupancy and price.

“Taken together, the ongoing strength we are seeing across our record booking curve, which has extended out even further, reinforces our confidence in the durability of demand for our cruise lines and the earnings power of our business,” Weinstein said.

Cash Flow Supports Capital Returns

Operating cash flow totaled $1.41 billion. Carnival ended the quarter with $1.22 billion in cash and cash equivalents and $23.91 billion in total debt.

The company completed about $1.2 billion of share repurchases year to date. It also paid $204 million in quarterly dividends and redeemed $500 million of 7% coupon notes.

S&P also upgraded Carnival to investment grade.

Carnival Raises Full-Year Outlook

Carnival raised its fiscal 2026 adjusted EPS guidance to about $2.24 from $2.22, above the $2.22 analyst estimate.

The company expects adjusted net income of about $3.08 billion and adjusted EBITDA of about $7.14 billion.

Carnival also expects more than $150 million of operational improvement compared with its June guidance, despite an estimated $150 million impact from higher fuel prices.

For the fourth quarter, Carnival expects adjusted EPS of about 20 cents, below the 26-cent estimate. It also expects adjusted net income of about $274 million and adjusted EBITDA of about $1.30 billion.

CCL Price Action: Carnival shares were up 12.17% at $24.83 at the time of publication on Tuesday, according to Benzinga Pro data.

Image courtesy of Carnival Cruise Line