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Carnival (CCL) is cruising sharply higher following a robust 2Q25 earnings report that exceeded expectations and included an upward revision to FY25 guidance, reflecting resilient cruise demand despite broader macroeconomic headwinds. The company’s strong performance was propelled by robust close-in bookings and elevated onboard spending, which drove record Q2 revenues of $6.33 bln, up 9.5% yr/yr, surpassing the $6.21 bln FactSet consensus estimate.

While travel demand has softened in many areas due to rising economic pressures, cruises continue to demonstrate remarkable resilience, offering a compelling value proposition compared to land-based vacations, with bundled packages and all-inclusive pricing attracting cost-conscious consumers seeking predictable vacation costs.

• CCL's Q2 adjusted EPS soared 218% yr/yr to $0.35, comfortably beating the consensus estimate of $0.24, underpinned by strong operational execution and favorable pricing dynamics. A key driver of this EPS growth was a 6.4% yr/yr increase in net yields (in constant currency), which outperformed CCL’s March guidance by 200 bps, reflecting the company’s ability to capture higher revenue per passenger.
• Elevated onboard spending was a significant contributor, fueled by strong uptake of bundled packages that include drinks, Wi-Fi, and excursions, alongside premium offerings like spa services and specialty dining. Higher ticket prices, particularly in high-demand regions like the Caribbean and Mediterranean, further bolstered net yields, while disciplined cost management amplified profitability.
• CCL’s bullish FY25 outlook underscores confidence in sustained demand, with the company raising its full-year adjusted EPS guidance to $1.97 from $1.83. Although Q3 EPS guidance of $1.30 fell slightly short of expectations, the company projects Q3 net yields to rise approximately 3.5% above 2024’s already strong levels (in constant currency), signaling continued pricing power. For FY25, CCL projects net yields to jump by 5.0%.
• Record total customer deposits of $8.5 bln highlight robust booking momentum, while cumulative advanced bookings for 2026 are tracking in line with 2025’s record levels and at historically high prices (in constant currency), reinforcing CCL’s strong market position. This forward-looking strength reflects consumer enthusiasm for cruise vacations and CCL’s ability to lock in high-value bookings well in advance, providing visibility into future revenue streams.
• CCL’s impressive beat-and-raise performance bodes well for peers Royal Caribbean Cruises (RCL) and Norwegian Cruise Line Holdings (NCLH), set to report Q2 earnings on July 24 and July 31, respectively, as industry-wide tailwinds like strong bookings and yield growth are likely to lift their results, provided they execute similarly on cost control and onboard monetization.

The company's Q2 results and raised FY25 guidance highlight the enduring appeal of cruises as a cost-effective, high-value vacation option amid a challenging economic backdrop. The company’s ability to capitalize on robust demand through elevated onboard spending and favorable pricing dynamics positions it well for continued growth. With record bookings and strong consumer loyalty, CCL is steering toward a prosperous 2025.