Carnival (NYSE:CCL) reported first-quarter fiscal 2026 results that exceeded its December guidance, supported by higher yields, better-than-expected cost performance, and continued strength in onboard spending. Management also introduced a new multi-year framework, “Propel,” which includes targets for higher returns and increased capital returns to shareholders, alongside a newly announced $2.5 billion share repurchase authorization.
First-quarter results beat guidance on revenue, costs, and earnings
CEO Josh Weinstein said the company is “off to an excellent start to the year,” with first-quarter performance coming in ahead of guidance due to “healthy fundamentals and solid execution.” He highlighted record first-quarter revenue, net yields, operating income, EBITDA, and customer deposits. Weinstein also pointed to continued momentum in onboard and pre-cruise sales, noting that guests are engaging earlier by purchasing “more inclusive packages, excursions and other experiences” ahead of sailing.
- Revenue favorability: Yield increased 2.7% year-over-year, more than 100 basis points better than December guidance, driven by strong closing demand, higher ticket prices, and stronger onboard spending. Bernstein said yield improvement was driven by increases on both sides of the Atlantic.
- Costs (excluding fuel) better than expected: Cruise costs without fuel per available lower berth day (ALBD) rose 5.3% year-over-year, which was “more than half a point better” than December guidance, helped by cost-saving initiatives firmed up during the quarter.
- Additional operational items: Improvements in depreciation, net interest expense, and fuel consumption, including a 4.7% year-over-year reduction in fuel consumption.
Bernstein said total first-quarter operational improvements of $0.07 per share were partially offset by fuel price and currency impacts of $0.04 per share.
Bookings and deposits reached new first-quarter records
Weinstein said demand remained robust, with bookings for current-year sailings increasing 10% year-over-year. He added that the company holds a “record book position for the remainder of the year at historically high prices,” with nearly 85% of 2026 already on the books and less inventory available than this time last year.
Weinstein also noted that cumulative future-year bookings reached a first-quarter record, contributing to customer deposits of “almost $8 billion,” surpassing last year’s first-quarter high water mark by nearly 10%.
During the Q&A, Weinstein said the company was not seeing meaningful changes in cancellation trends. He acknowledged that bookings in the last few weeks reflected the uncertain global backdrop, but said the company was “pretty pleased” with overall progression, citing strength in Alaska and the Caribbean and noting that Northern Europe “is going quite well.” He also said Eastern Mediterranean demand has a different profile than Western Mediterranean or Northern Europe, and that the company entered the period with “a nice amount of headroom” due to efforts to pull forward occupancy and bookings during Wave season.
Full-year guidance: operational improvement offset by fuel headwind
Bernstein provided full-year March guidance calling for earnings per share of $2.21. He said the outlook includes the first-quarter operational improvement of $0.07 per share and an additional $0.04 improvement expected over the remaining three quarters from depreciation, fuel consumption, net interest expense, and income tax expense. However, Bernstein said a $0.38 per share headwind from higher fuel prices, driven by recent geopolitical events, more than offsets the operational improvements.
Given volatility in fuel markets, Bernstein said guidance assumes moderation over the balance of the year rather than using elevated spot pricing. The company’s assumptions include purchase prices for March and early April, then Brent averaging $90 per barrel for the remainder of April and May, $85 in the third quarter, and $80 in the fourth quarter. Bernstein added that a 10% change in fuel cost per metric ton (excluding emission allowances) for the remainder of the year would impact the bottom line by $160 million, or $0.11 per share.
For 2026, Carnival expects yield growth of approximately 2.75%, 25 basis points better than December guidance, and cruise costs without fuel per ALBD up approximately 3.1%, 15 basis points better than December. Bernstein said the yield and cost assumptions for the balance of 2026 remain unchanged from December and that costs are expected to decelerate in the second half of the year due to timing items, the full-year impact of Celebration Key Grand Bahama (which opened in July 2025), and seasonal patterns in advertising and repair and maintenance.
Propel plan outlines 2029 targets and capital return strategy
Weinstein introduced the “Propel” framework, described as “powering growth and returns responsibly.” By 2029, Carnival is targeting:
- Return on invested capital above 16%
- EPS growth of more than 50% versus 2025
- Distribution of more than 40% of cash from operations to shareholders, or approximately $14 billion
Weinstein said Propel is designed to convert strong and growing demand into higher returns, earnings, and cash flow while maintaining disciplined capacity growth and a strong balance sheet. He outlined four drivers: yield expansion through commercial execution; measured capacity growth with three ships entering service during the Propel period and modernization programs; further monetization of destination assets (including Celebration Key, Grand Bahama, Relaxaway Half Moon Cay, Isla Tropical in Roatán, and the company’s Alaska land footprint); and continued cost discipline.
The company also set targets for net debt to EBITDA of 2.75x and a reduction in greenhouse gas intensity of more than 25% versus 2019 levels. Weinstein said Carnival expects to reinvest more than $15 billion back into the business during the period, while also increasing shareholder returns through a reinstated dividend, opportunistic buybacks, and the newly announced $2.5 billion share repurchase authorization.
Fuel: focus on consumption, with flexibility on itineraries
Management emphasized that fuel remains a meaningful variable, but Weinstein reiterated that the company’s long-term response is to “use less.” He said per-unit consumption improvements versus 2019 translate to about $650 million in savings in 2026 alone, and about $250 million versus 2023. In response to questions about prolonged high fuel prices, Weinstein said Carnival can adjust sailing practices and, longer term, change itineraries and port selections. He also pointed to the company’s Caribbean destination investments as offering “a strategic fence” by providing attractive options closer to home ports.
Bernstein said the company continues to evaluate fuel hedging, noting it is a topic discussed regularly, while Weinstein and Bernstein stressed the company’s guidance reflects a “line in the sand” based on market conditions at the time it was set and includes sensitivity disclosures for investors.
About Carnival (NYSE:CCL)
Carnival Corporation (NYSE: CCL) is a global cruise operator that provides leisure travel services through a portfolio of passenger cruise brands. The company’s core business is operating cruise ships that offer multi-night voyages and associated vacation services, including onboard accommodations, dining, entertainment, spa and wellness offerings, casinos, youth programs, and organized shore excursions. Carnival markets cruise vacations to a broad range of consumers, from value-focused travelers to premium and luxury segments, through differentiated brand positioning and onboard experiences.
Its operating structure comprises multiple well-known cruise brands that target distinct geographic and demographic markets.
