Carnival Reports Q3 2026 Results: Full Earnings Call Transcript

Carnival (NYSE: CCL ) held its third-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Carnival Corporation & plc reported record revenues, yields, and net income for Q3 2026, with net income exceeding guidance by over $100 million. 5%, driven by strong booking trends and onboard spending, contributing to a raised yield expectation for Q4. Operational improvements, including cost control and reduced fuel consumption, offset the impact of higher fuel prices, with over $150 million of operational improvements achieved since June guidance. For 2027, Carnival is already half-booked with record occupancy and pricing levels, and bookings for 2028 are showing higher occupancy and prices.

The company highlighted its destination strategy, noting the success of Celebration Key and other private destinations, which are expected to boost guest numbers significantly in 2027. Carnival continues to invest in fleet modernization, with plans for new ships and upgrades to existing vessels, and is optimizing deployments to tap into high-demand markets like Northern Europe. Carnival's loyalty program has seen increased co-branded credit card issuances and high member engagement since its launch, supporting long-term customer loyalty and value. 2 billion in stock repurchases and ongoing dividends, reflecting a focus on disciplined growth and shareholder returns.

Management expressed a positive outlook for 2027 despite some Q1 disruptions, emphasizing strong demand, strategic deployment, and continued operational efficiencies. Full Transcript OPERATOR Greetings and welcome to Carnival Q3 2026 earnings results. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation.

If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth.

Beth Roberts, Senior Vice President, Investor Relations Thank you. Good morning and welcome to our third quarter 2026 earnings conference call. I'm joined today by our CEO Josh Weinstein, our CFO David Bernstein, and remotely our chair Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking.

Therefore, I will refer you to today's press release and our filings with the SEC for additional information on factors and risks that could cause actual results to differ from our expectations. We'll be referencing certain non-GAAP financial measures, including yields, cruise costs without fuel, EBITDA, net income, and related statistics, all of which are on a net basis or adjusted as defined unless otherwise stated. S. GAAP is included in our earnings press release and our investor presentation.

References to ticket prices, yields, and cruise costs without fuel are on a constant-currency basis unless we note otherwise. Please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh. Josh Weinstein, President & CEO Thanks, Beth, and good morning, everyone.

Once again we closed out another excellent quarter with revenues, yields and reported net income all reaching new highs while customer deposits once again set a record. Strong execution delivered approximately $2 billion to the bottom line, exceeding our guidance by $100 million with both revenue and costs contributing to the outperformance. 5%, more than a point better than expected. The improvement in booking trends we highlighted on our last call continued to build throughout the quarter with better close-in demand translating into higher revenues.

That momentum also enabled us to raise our yield expectations for the fourth quarter. And on the cost side, our teams continued to find opportunities to operate more efficiently. Excluding fuel, unit costs came in a point better than guidance for the quarter, and to date we have improved our full-year expectations by more than a point, even after absorbing continued pressure from higher-than-expected inflation. Fuel consumption also came in three points better than expected as our teams continue to find ways to use less, which is better for the environment, better for our bottom line, and ultimately the best way to manage fuel costs.

Taken together, we've generated more than $150 million of operational improvement since our June guidance, fully offsetting the impact of higher fuel prices that we now expect. Yes, fuel can be a volatile input cost with a track record of prices going up and down, but amidst that noise, let's not lose sight of our underlying operational improvement. What matters most over the long term is our ability to continually improve the actual performance of the business, generating more demand, managing our booking curve for maximum revenue, operating more efficiently, and ultimately producing more earnings and higher returns.

And while it's still early, we are beginning to capture opportunities embedded in our PROPEL targets sooner than expected, leveraging our unmatched scale, sharpening commercial execution, investing where we generate outsized returns, and advancing technology to enhance revenue and control costs. This includes putting AI to work across our commercial systems to help our teams make better decisions and provide more personalized experiences for our guests, automating more of how we operate shoreside and identifying new efficiencies in how we manage our vessels. With 2026 largely on the books, our attention is turning to 2027 and beyond.

For full year 2027, we are already half booked, with both occupancy and pricing at record levels. Bookings taken over our third quarter solidified this position as we saw very healthy increases compared to last year's levels. And while the booking disruption we experienced this spring extended into the first quarter of 2027, Q1 bookings have also rebounded meaningfully over the past three months, reinforcing our view that the impact is temporary. Demand remains broad based, including very healthy demand for our peak summer European deployments.

2028 is also off to an excellent start at higher occupancy and even higher prices year over year, and our booking curve is further out than it has ever been at this point in the year. Customer deposits tell a similar story. 6 billion, up about 7% despite flat capacity growth over the next 12 months. With demand continuing to grow well ahead of our intentionally measured capacity growth, we have an opportunity to keep managing the booking curve for price.

And that is exactly what our strategy is designed to do: drive more earnings and higher returns from our existing asset base with relentless focus and discipline. One of the most visible examples is our destination strategy. Celebration Key recently marked its first anniversary, having welcomed almost two and a half million guests in its first year alone. The guest response has been exceptional.

Celebration Key is resonating with our loyal guests, giving them another compelling reason to sail with us again while attracting new-to-cruise guests as well. And we are only just beginning to realize its potential. 5 million guests next year with 31 ships calling versus 26 this year. Its reach is also expanding beyond Carnival Cruise Line, with Princess joining next month, followed by select calls from AIDA and Costa late next year.

And Celebration Key is just one part of what is becoming an increasingly differentiated destination portfolio. Our recently expanded experiences at Relax Away, Half Moon Cay and Isla Tropical Roatán have already welcomed approximately 250,000 guests each with very positive guest response. We have made these amazing beach experiences even better and available to millions more guests. We can now pair the idyllic natural beauty of Relax Away Long, one of our highest-rated beach experiences, with the high-energy experience of Celebration Key, giving our guests two completely different beach experiences on the same itinerary and further differentiating what only we can offer.

In fact, next year 35% of Carnival Cruise Line's Caribbean capacity will feature itineraries visiting both of these incredible destinations on the same cruise. And there is more to come. As we continue to develop our destination footprint, differentiate the vacation experiences we offer and make our existing fleet even more valuable, we are applying the same return-focused mindset across the rest of the business. We're finding new ways to deepen guest loyalty and increase lifetime value.

In the year following Carnival Cruise Line's June 2025 announcement of its new loyalty program, co-branded credit card issuances increased 20% even before the new benefits took effect. And since the program went live September 1st, issuances have accelerated significantly, more than tripling from pre-announcement levels. And while the program has only been live for a few weeks, thousands of members have already redeemed tens of millions of points on everything from a drink on board to a suite on Carnival Celebration, exactly the kind of flexibility and choice the new program was designed to provide. We're also continuing to invest selectively in our fleet.

Carnival Festival enters service in the Caribbean in May in time for the summer season and begins contributing to our results in the second half of the year. Our midlife modernization programs continue to progress with additional vessels planned for AIDA and Holland America. Next year we will also complete a major upgrade of Cunard's flagship Queen Mary 2. As the world's only ocean liner providing regular transatlantic service, it is a one-of-a-kind asset and our investment is designed to ensure it continues to generate attractive returns for decades to come.

And we continue to optimize deployment toward markets where we see the greatest opportunity. Next year, for example, we are leaning even further into our successful Northern European deployments, where guest interest continues to grow in coolcations, cooler weather destinations and outdoor activities like hiking, exploring the fjords of Norway and enjoying the Northern Lights. Importantly, we are doing this in the context of relatively flat overall capacity growth, meaning that we are actively shifting our deployment mix toward the opportunities we find most attractive.

As a result, in 2027, Europe will for the first time tie with the Caribbean as our largest deployment region, each representing 34% of our mix. Of course, the Caribbean remains an important part of our strategy and will benefit from the continued expansion of our Paradise Collection portfolio even as we diversify our footprint more globally, and our diversified footprint is further strengthened by our industry-leading presence in Alaska, the ultimate coolcation.

Our advantage there extends beyond cruising to our integrated land and sea experiences, supported by thousands of hotel and lodge rooms, 20 glass-domed rail cars and the largest fleet of motor coaches in all of Alaska. Together, these assets give our guests unparalleled access to experience the extraordinary natural beauty, culture and wildlife of the Great Land in ways that are difficult to replicate. Taking a step back, these are all different initiatives across different brands and geographies, but the strategy behind them is consistent: create differentiated demand, improve revenue generation and drive attractive returns on the capital we deploy.

And clearly those efforts are showing up in our financial results. Despite the significant fuel price headwind this year, we expect to finish 2026 with even more brands generating mid-teens or higher returns on invested capital than last year. That is meaningful progress and we still see considerable runway ahead with each of our brands on a path toward higher returns. The consistency of our performance is also translating into increasingly durable cash flow, giving us the ability to invest in the business, strengthen the balance sheet and return capital to shareholders at the same time.

And yes, we are doing all three. We continue to invest in the highest return opportunities across our brands and destinations. We continue to reduce debt and strengthen our financial position. 2 billion of stock alongside our ongoing dividend.

That balance is important. Our objective is not simply to grow; it is to grow earnings and returns in a disciplined way while increasing the amount of cash we can return to shareholders over time. And importantly, we have the best team in all of travel and leisure making it happen. None of what we have accomplished or what lies ahead will be possible without the dedication of our more than 160,000 team members, both ship and shore.

I want to thank them for everything they do every day to deliver unforgettable happiness to our guests by providing extraordinary cruise vacations while honoring the integrity of every place we visit, life we touch and ocean we sail. I also want to thank our loyal guests, our investors, our travel agent partners, our destination and shipbuilding partners, and all of our stakeholders for their continued support. We have tremendous momentum, an incredible team and significant opportunities still ahead of us. With that, I'll turn the call over to David to walk you through the quarter and our guidance in more detail.

David Bernstein, Chief Financial Officer Thank you, Josh. I'll begin with our third quarter results, then cover our updated full year guidance and several considerations for 2027 before closing with capital allocation. 08 per share. The outperformance versus June guidance was driven by three factors.

05 per share. 5% year over year on top of almost 5% growth in last year's third quarter. 2 percentage points above June guidance. Second, continued cost discipline drove additional upside.

02 per share. Importantly, nearly all the third quarter cruise cost savings flowed through to our full year September guidance. 01 per share of favorability came from further improvements in fuel consumption where we delivered a nearly 4% year over year reduction on top of the over 5% reduction in last year's third quarter as well as the full year 2025. Now turning to our full year September guidance, we expect operational improvement of more than $150 million in net income compared to June guidance driven by improvements in yields, cruise costs excluding fuel per ALBD and fuel consumption, overcoming $150 million impact from increased fuel prices.

3%, which is over half a point better than June guidance. 08 per share for the year. 4 of a point above our implied June guidance on a normalized basis adjusting for the impact of the new loyalty program. 3% consistent with the year over year growth we saw in the third quarter.

02 per share cost savings account I previously mentioned for the third quarter. 1% after reflecting the timing of certain expenses between the years, partial year operating expenses from two exclusive destinations and the impact of certain elevated logistics costs as a result of the disruption from the Middle East conflict. 02 from fuel consumption and other items. 01 per share of EPS accretion while higher fuel prices were an 11 cent per share headwind.

However, the 26% reduction in fuel consumption per ALBD since 2019 helps to mitigate the impact of the fuel price increases as we consume less fuel. The lower consumption represents savings of nearly $750 million at September guidance fuel prices. 24, up 2 cents from our previous guidance. Now a few things for you to consider for 2027.

We are forecasting a capacity increase of half a percent in 2027 compared to 2026. As Josh indicated, we are in a strong position for 2027 with both occupancy and price at record levels.