Since last earnings call, demand and
bookings have exceeded expectations
Adjusted EPS in 2024 is now expected to be
$9.90 - $10.10
The company expects to achieve all Trifecta
goals in 2024
MIAMI, Feb. 21,
2024 /PRNewswire/ -- Royal Caribbean Group (NYSE:
RCL) today provided an update on demand and updated its 2024
guidance.
The company continues to be very encouraged about the demand and
pricing environment for 2024. Since its most recent update on its
Q4 2023 earnings call, the WAVE booking season has exceeded the
company's initial expectations, with the first 5 weeks of the year
resulting in the best WAVE booking weeks in the company's history.
Bookings have been significantly higher than during the same period
last year, with the back half of the year up by more than the front
half. For 2024, all four quarters and all key products are booked
ahead of the same time last year in both rate and volume. Consumer
spending for onboard purchases continue to exceed prior years
driven by greater participation at higher prices, indicating
quality and healthy future demand.
"Since our last earnings call, robust demand for our vacation
experiences has significantly exceeded our initial expectations,"
said Jason Liberty, president and
CEO of Royal Caribbean. "As a result, we are increasing our 2024
guidance on stronger revenue outlook, and we expect to achieve all
Trifecta goals in 2024. Trifecta marks
an important milestone as we remain intensely focused on delivering
a lifetime of vacations and priceless memories for our guests while
delivering exceptional long-term shareholder value."
As a result of the strong WAVE season, the company is increasing
its 2024 Adjusted EPS guidance by $0.40 compared to its February guidance. For the
full year, Adjusted EPS is now expected to be $9.90 to $10.10
driven by an increase in constant currency net yield growth of
approximately 100 bps compared to the February guidance.
Approximately $0.15 of the full year
increase in adjusted EPS is driven by an improved revenue outlook
for the first quarter of 2024. The company now expects to achieve
all Trifecta goals in 2024.
About Royal Caribbean Group
Royal Caribbean Group
(NYSE: RCL) is one of the leading cruise companies in the world
with a global fleet of 65 ships traveling to approximately 1,000
destinations around the world. Royal Caribbean Group is the owner
and operator of three award winning cruise brands: Royal Caribbean
International, Celebrity Cruises, and Silversea Cruises and it is
also a 50% owner of a joint venture that operates TUI Cruises and
Hapag-Lloyd Cruises. Together, the brands have an additional 8
ships on order as of December 31,
2023. Learn more at www.royalcaribbeangroup.com or
www.rclinvestor.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this press release relating
to, among other things, our future performance estimates, forecasts
and projections constitute forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These statements
include, but are not limited to: statements regarding financial
results for 2024; demand for our brands; and our progress towards
achievement of our Trifecta goals. Words such as "anticipate,"
"believe," "could," "driving," "estimate," "expect," "goal,"
"intend," "may," "plan," "project," "seek," "should," "will,"
"would," "considering," and similar expressions are intended to
help identify forward-looking statements. Forward-looking
statements reflect management's current expectations, are based on
judgments, are inherently uncertain and are subject to risks,
uncertainties and other factors, which could cause our actual
results, performance or achievements to differ materially from the
future results, performance or achievements expressed or implied in
those forward-looking statements. Examples of these risks,
uncertainties and other factors include, but are not limited to,
the following: the impact of contagious illnesses on economic
conditions and the travel industry in general and the financial
position and operating results of our Company in particular, such
as: governmental and self-imposed travel restrictions and guest
cancellations; our ability to obtain sufficient financing, capital
or revenues to satisfy liquidity needs, capital expenditures, debt
repayments and other financing needs; the impact of the economic
and geopolitical environment on key aspects of our business, such
as the demand for cruises, passenger spending, and operating costs;
incidents or adverse publicity concerning our ships, port
facilities, land destinations and/or passengers or the cruise
vacation industry in general; concerns over safety, health and
security of guests and crew; further impairments of our goodwill,
long-lived assets, equity investments and notes receivable; an
inability to source our crew or our provisions and supplies from
certain places; an increase in concern about the risk of illness on
our ships or when traveling to or from our ships, all of which
reduces demand; unavailability of ports of call; growing
anti-tourism sentiments and environmental concerns; changes in U.S.
foreign travel policy; the uncertainties of conducting business
internationally and expanding into new markets and new ventures;
our ability to recruit, develop and retain high quality personnel;
changes in operating and financing costs; our indebtedness, any
additional indebtedness we may incur and restrictions in the
agreements governing our indebtedness that limit our flexibility in
operating our business; the impact of foreign currency exchange
rates, the impact of higher interest rate and food and fuel prices;
vacation industry competition and changes in industry capacity and
overcapacity; the risks and costs related to cyber security
attacks, data breaches, protecting our systems and maintaining
integrity and security of our business information, as well as
personal data of our guests, employees and others; the impact of
new or changing legislation and regulations (including
environmental regulations) or governmental orders on our business;
pending or threatened litigation, investigations and enforcement
actions; the effects of weather, natural disasters and seasonality
on our business; the impact of issues at shipyards, including ship
delivery delays, ship cancellations or ship construction cost
increases; shipyard unavailability; the unavailability or cost of
air service; and uncertainties of a foreign legal system as we are
not incorporated in the United
States.
More information about factors that could affect our operating
results is included under the caption "Risk Factors" in our most
recent quarterly report on Form 10-K, as well as our other filings
with the SEC, copies of which may be obtained by visiting our
Investor Relations website at www.rclinvestor.com or the SEC's
website at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this release, which are based on
information available to us on the date hereof. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Selected Operational and Financial Metrics
Adjusted EBITDA is a non-GAAP measure that represents
EBITDA (as defined below) excluding certain items that we believe
adjusting for is meaningful when assessing our profitability on a
comparative basis.
Adjusted Earnings (Loss) per Share ("Adjusted EPS") is a
non-GAAP measure that represents Adjusted Net Income (Loss)
attributable to Royal Caribbean Cruises Ltd. (as defined below)
divided by weighted average shares outstanding or by diluted
weighted average shares outstanding, as applicable. We believe that
this non-GAAP measure is meaningful when assessing our performance
on a comparative basis.
Adjusted Net Income (Loss) attributable to Royal Caribbean
Cruises Ltd. is a non-GAAP measure that represents net
income (loss) less net income attributable to noncontrolling
interest, excluding certain items that we believe adjusting for is
meaningful when assessing our performance on a comparative
basis.
Constant Currency is a significant measure for our
revenues and expenses, which are denominated in currencies other
than the U.S. Dollar. Because our reporting currency is the U.S.
Dollar, the value of these revenues and expenses in U.S. Dollar
will be affected by changes in currency exchange rates. Although
such changes in local currency prices are just one of many elements
impacting our revenues and expenses, it can be an important
element. For this reason, we also monitor our revenues and expenses
in "Constant Currency" - i.e., as if the current period's currency
exchange rates had remained constant with the comparable prior
period's rates. We do not make predictions about future exchange
rates and use current exchange rates for calculations of future
periods. It should be emphasized that the use of Constant Currency
is primarily used by us for comparing short-term changes and/or
projections. Over the longer term, changes in guest sourcing and
shifting the amount of purchases between currencies can
significantly change the impact of the purely currency-based
fluctuations.
EBITDA is a non-GAAP measure that represents of Net
Income (Loss) attributable to Royal Caribbean Cruises Ltd.
excluding (i) interest income; (ii) interest expense, net of
interest capitalized; (iii) depreciation and amortization expenses;
and (iv) income tax expense. We believe that this non-GAAP measure
is meaning when assessing our operating performance on a
comparative basis.
Invested Capital represents the most recent five-quarter
average of total debt (i.e., Current portion of long-term debt plus
Long-term debt) plus the most recent five-quarter average of Total
shareholders' equity. We use this measure to calculate ROIC (as
defined below).
Return on Invested Capital ("ROIC") represents Adjusted
Operating Income (Loss) divided by Invested Capital. We believe
ROIC is a meaningful measure because it quantifies how efficiently
we generated operating income relative to the capital we have
invested in the business. ROIC is also used as a key metric in our
long-term incentive compensation program for our executive
officers.
Adjusted Gross Margin represent Gross Margin, adjusted
for payroll and related, food, fuel, other operating, and
depreciation and amortization expenses. Gross Margin is calculated
pursuant to GAAP as total revenues less total cruise operating
expenses, and depreciation and amortization.
Net Yields represent Adjusted Gross Margin per APCD.
We utilize Adjusted Gross Margin and Net Yields to manage our
business on a day-to-day basis as we believe that they are the most
relevant measures of our pricing performance because they reflect
the cruise revenues earned by us net of our most significant
variable costs, which are commissions, transportation and other
expenses, and onboard and other expenses.
Trifecta refers to the multi-year Adjusted EBITDA
per APCD, Adjusted EPS and ROIC goals we publicly announced in
November 2022 and seeking to achieve
by the end of 2025. We designed this program to help us better
execute and achieve our business goals by clearly articulating
longer-term financial objectives. Under the Trifecta Program, we
are targeting Adjusted EBITDA per APCD of at lease $100, Adjusted EPS of at least $10, and ROIC of 13% or higher by the end of
2025.
Adjusted Measures of Financial Performance
We have not provided in this press release a quantitative
reconciliation of the projected non-GAAP financial measures to the
most comparable GAAP financial measures because preparation of
meaningful U.S. GAAP projections would require unreasonable effort.
Due to significant uncertainty, we are unable to predict, without
unreasonable effort, the future movement of foreign exchange rates,
fuel prices and interest rates inclusive of our related hedging
programs. In addition, we are unable to determine the future impact
of non-core business related gains and losses which may result from
strategic initiatives. These items are uncertain and could be
material to our results of operations in accordance with U.S. GAAP.
Due to this uncertainty, we do not believe that reconciling
information for such projected figures would be meaningful.
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SOURCE Royal Caribbean Group