Carnival (CCL +6%) concluded FY24 on a high note, reporting an EPS beat for Q4 (Nov). Although not as substantial as previous quarters, CCL swung to an adjusted EPS of $0.14 from a $(0.07) loss last year. Importantly, Carnival anticipates Q1 (Feb) EPS to be roughly breakeven, surpassing analysts' expectations of a slight loss. However, FY25 adjusted EPS guidance of $1.70 fell short of expectations.
- Revenue increased by 10% year-over-year to $5.94 billion, aligning with forecasts. Adjusted EBITDA, a key metric due to cruise ships' depreciation, rose 29% year-over-year to a record $1.22 billion, exceeding the $1.14 billion guidance. Q1 adjusted EBITDA is projected at approximately $1.04 billion, with FY25 expected around $6.60 billion.
- In 2024, prices rose across all major brands, ranging from mid-single digits to mid-teens, with onboard spending levels accelerating each quarter.
- Carnival described FY24 as a record year with all-time high revenues driven by strong demand. The company successfully increased prices across its major cruise lines. Looking ahead, CCL is enhancing its destination strategy to attract more guests, anticipating significant yield growth in 2025.
- Despite less inventory, Q4 booking volumes for 2025 exceeded the previous year, indicating strong demand. Booking volumes for 2026 also set new records, highlighting sustained interest. CCL's North American and European segments have reached their longest advanced booking windows on record.
Overall, Carnival ended FY24 on a strong note and remains optimistic about FY25. The ability to raise prices while maintaining demand in FY24 is noteworthy. The positive booking trends suggest another promising year ahead. Although the recovery post-pandemic took longer than anticipated, the demand environment now appears robust.
