Story Stocks^®

Carnival (CCL) is trading lower today despite posting another strong quarter and raising guidance. For Q3 (Aug), the company delivered its third consecutive double-digit EPS beat, while revenue rose 3.3% yr/yr to $8.15 bln, marking a tenth straight quarter of record sales.

• Strength was fueled by robust close-in demand, higher on-board spending, and disciplined cost controls. Net yields hit an all-time high, up 4.6% in constant currency (same-ship basis), beating guidance by 1.1 pts. Gross margin yields rose 6.4% yr/yr, while customer deposits reached a record $7.1 bln.
• As a result, net income climbed to a record $1.9 bln (+$116 mln vs. 2024), surpassing the prior peak set in 2019. Adjusted EBITDA also set a record at $3.0 bln.
• A positive here is that booking trends continue to improve, with nearly half of 2026 booked, in line with 2025's record levels but at historically high prices. Management highlighted that 2027 is also off to a record start.
• CCL raised FY25 EPS outlook for the third straight quarter, now calling for ~55% yr/yr growth, and guided Q4 EPS above consensus. The FY25 raise exceeded the size of the Q3 beat, suggesting some room for further upside.

Briefing.com Analyst Insight

This was a strong quarter for CCL. Cruise demand remains healthy, with management pointing to firm bookings into 2026 and even 2027. The company is executing well on cost controls while benefitting from stronger pricing, underscoring resilience in the category. Despite the solid results and guidance raise, the stock seems to be pulling back in a sell-the-news move rather than any weakness in fundamentals. With record results and improving booking trends, the beat-and-raise report also sets a constructive tone for peers Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH).