Royal Caribbean Group: New Performance Initiative

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The Royal Caribbean Group introduced another new company slogan on Thursday’s third quarter earnings call called the Trifecta Performance Initiative.

Defined as a three-year program, the goal is to reach triple digit adjusted EBITDA and exceed the prior record adjusted EBITDA per available passenger cruise day of $87 in 2019; double-digit adjusted earnings per share, again exceeding the record of $9.54 per share in 2019; and for the return on invested capital to reach the teens, also exceeding the prior ROIC of 10.5 percent from 2019.

To achieve these goals, Jason Liberty, president and CEO, said the company expects to continue to execute what he called their proven formula for moderate capacity growth, moderate yield growth, and strong cost controls.

For the third quarter, Royal Caribbean beat analysts’ expectations by posting net income of $32.9 million, or $0.13 per share, on revenues of $2.9 billion.

While forecasting a loss for the fourth quarter, Royal Caribbean executives said that 2023 bookings were in line with historical trends and at record pricing. The company’s cruise capacity will be up 14 percent, with 10 more ships, compared to 2019.

Liberty also commented that the entry of new ships and the exit of Azamara has had a positive effect.

The immediate market response to the call sent Royal Caribbean’s stock up nearly 7 percent and close to $53 at press time.

Previous financial performance programs were referred to as the Double Double and the 20 by 25 (focused on reaching $20 of adjusted earnings per share and reducing the company’s carbon footprint by 25 percent).

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