Plain sailing in fourth quarter sees Royal Caribbean cruise out ahead of expectations
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Plain sailing in fourth quarter sees Royal Caribbean cruise out ahead of expectations

Luxury cruise line Royal Caribbean, a core holding in Dominion’s Global Trends Luxury Fund, reported earnings this week that beat on both the top and bottom lines, as a number of key strategies pay off. The company is well-positioned to deliver on an increasingly powerful trend in the luxury world: “experiential luxury”. This preference towards experiences over things affects all age groups, but is most pronounced in Millennial-and-younger consumers. In other words (and as Royal Caribbean’s earnings and strategic plans demonstrate): focussing on experiences is paying off today, but should pay off even more in the future.

Royal Caribbean’s share price has gone on a fantastical voyage itself year to date (+26%)

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Source: Yahoo Finance

Royal Caribbean reported fourth-quarter adjusted net income of $322.1 million, which works out at $1.53 per share. That’s a major increase against comparable figures from last year, when the company posted earnings of $1.34 per share on adjusted net income of $288 million. It’s also a solid beat against the Street’s predictions, which were for earnings of $1.51 per share. The company also beat on revenue, delivering $2.33 billion against 4Q2018’s $2 billion. Again, this topped analysts’ expectations for the three-month period, which were for revenues of $2.31 billion. Perhaps even more encouraging: the company said it delivered these strong results despite significant negative impact from currency fluctuations.

The company is pushing ahead with a number of strategies that are designed to maximise the experiential possibilities on their cruises. These include outfitting ships with remarkable new forms of entertainment (like bungee jumps, wind tunnels, and more) as well as creating its own selection of private islands! We’ve reported on these man-made cruise destinations previously, and you can learn more about them on Royal Caribbean’s official video guide, below:

Get the low down about a “perfect day” at Royal Caribbean’s “CocoCay” island

Looking to the coming quarter, which ends in April, Royal Caribbean said it hopes to deliver earnings of $1.10 per share, and full year earnings for 2019 in the range of $9.75 to $10. Jason T. Liberty, the company’s executive vice president and chief financial officer, released a statement saying: “Our yield outlook for 2019 is very encouraging. Demand for our brands continues to accelerate and we are well positioned for another year of double-digit growth in our earnings per share.”

Disclosure
Royal Caribbean Cruises Ltd. is a core holding in Dominion’s Global Trends Luxury Fund.


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