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Carnival (CCL +6%) wrapped up FY24 on a solid note. The cruise line operator reported a nice EPS beat for Q4 (Nov). It was not the double-digit EPS beats we saw in Q2 and Q3, but still was good upside. CCL swung to adjusted EPS of $0.14 from a $(0.07) loss in the year ago period. Perhaps more importantly, Carnival expects Q1 (Feb) EPS to be roughly breakeven while analysts were expecting a slight loss. The company did guide FY25 adjusted EPS to $1.70, which was below analyst expectations.

• Revenue rose 10.0% yr/yr to $5.94 bln, which was in-line. Adjusted EBITDA is a good metric to use given the huge depreciation generated by capital-intensive cruise ships. Adjusted EBITDA in Q4 jumped 29% yr/yr to a record $1.22 bln, which was ahead of the $1.14 bln prior guidance. Adjusted EBITDA guidance for Q1 is approx. $1.04 bln and for FY25 it is approx. $6.60 bln.
• For 2024, prices were up in all of its major brands and trades between mid-single digits to mid-teens. Furthermore, onboard spending levels actually accelerated sequentially each quarter throughout the year.
• Carnival said this was an incredibly strong finish to a record year. Revenues hit an all-time high driven by a strong demand environment. CCL was able to drive strong pricing in 2024 vs 2023 across its major cruise lines and trades. Looking ahead, CCL is actively working on an enhanced destination strategy to provide guests with yet another reason to take a cruise. CCL says 2025 is shaping up to be another banner year with yield growth expected to far outpace historical growth rates.
• Furthermore, even with less inventory available, booking volumes taken during Q4 for 2025 were higher than the prior year for a strong 2024, despite the traditionally slower period around the election. Booking volumes taken during Q4 for 2026 continued to break records, reflecting sustained demand even for further out sailings. CCL says its North American and European segments are each at their longest advanced booking windows on record.

Overall, this was a solid way to close out FY24 and CCL sounds pretty bullish about FY25. What stands out to us is that CCL was able to raise prices in FY24 and still attracted good demand. CCL also sounds excited about FY25 as booking trends point to another solid year. Briefing.com profiled CCL as an Investment Idea in 2021 as we figured cruises would be among the last modes of travel to recover following the pandemic. The recovery has taken longer than we expected, but it seems that the stock is finally reflecting a healthy demand environment.