ZACKSยท2025-07-31 17:55Core Insights - Royal Caribbean Cruises Ltd. (RCL) reported mixed second-quarter 2025 results, with adjusted earnings exceeding estimates while revenues fell short, although both metrics showed year-over-year growth [1][10] Booking Updates - The second quarter of 2025 saw a strong booking environment for Royal Caribbean, driven by robust consumer demand across all brands and itineraries, with a notable acceleration in bookings compared to the previous quarter [2] - Approximately 75% of travelers plan to spend the same or more on leisure travel in the next 12 months, indicating positive consumer sentiment [2] - A shift in booking behavior was observed, with over half of travelers now booking closer to their departure date than in previous years [2] Financial Performance - For 2025 and 2026, Royal Caribbean's booked position aligns with historical levels but at higher average per diems, indicating strong demand and pricing power [3] - Onboard spending and pre-cruise purchases have exceeded prior-year levels, enhancing yield performance [3] New Assets and Experiences - The strength in bookings extends to Royal Caribbean's newest ships, such as Star of the Seas and Celebrity Xcel, which have shown solid booking volumes and pricing [4] - Early demand for the newly launched Royal Beach Club Paradise Island has been described as "incredibly strong," supporting the company's strategy of offering premium destination-led experiences [4] Outlook - For the third quarter of 2025, Royal Caribbean expects depreciation and amortization expenses to be between $425 million and $435 million, with adjusted EPS projected in the range of $5.55 to $5.65 [6] - The company anticipates net yields to increase by 2.3% to 2.8% on a reported basis year-over-year [6] - For 2025, depreciation and amortization expenses are expected to be between $1.70 billion and $1.71 billion, with adjusted EPS anticipated between $15.41 and $15.55, an increase from previous expectations [7] - Net yields for 2025 are projected to rise by 3.5% to 4% on a reported basis year-over-year [7]