As consumers increasingly favor experiences and services over discretionary goods, cruise operators are experiencing record booking rates for affordable cruise vacations. This trend has enabled them to raise ticket prices. Norwegian last adjusted its profit forecast in May. Similarly, competitors Carnival and Royal Caribbean Group have also raised their profit forecasts in recent weeks, despite ongoing concerns about elevated costs.
A significant portion of Norwegian’s new bookings are now shifting towards 2025 sailings. The company has updated its fiscal 2024 adjusted profit expectation to $1.53 per share, up from the previous forecast of $1.42.
In the second quarter, Norwegian reported an adjusted profit of 40 cents per share, surpassing analysts’ estimates of 35 cents per share, primarily due to reduced food and travel advisor commission costs. However, the company’s shares saw a slight decline in volatile trading, even as executives noted that their core U.S. consumer base remains strong.
Despite reporting quarterly revenue of $2.37 billion, it fell slightly short of LSEG estimates of $2.38 billion. “Investor expectations for revenues are high following strong results from Royal Caribbean, and Norwegian’s revenue didn’t quite meet those high expectations,” commented Patrick Scholes, an analyst at Truist Securities.
Onboard and other revenues, which encompass spending on spa services, casinos, shore excursions, and gift shop purchases, increased by 6% to $770.4 million, although this was below the expected $785.7 million. CEO Sommer emphasized that there was “zero decrease” in onboard spending and noted that guests continue to enjoy shore excursions and amenities such as specialty restaurants.
