Cruise vacation company Royal Caribbean (NYSE:RCL) will be announcing earnings results tomorrow before the bell. Here's what to look for.

Last quarter Royal Caribbean reported revenues of $3.33 billion, up 27.9% year on year, missing analyst expectations by 0.9%. It was a mixed quarter for the company, with optimistic earnings guidance for the next quarter. On the other hand, its number of passenger cruise days unfortunately missed and its revenue fell short of Wall Street's estimates.

Is Royal Caribbean buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Royal Caribbean's revenue to grow 27.9% year on year to $3.69 billion, slowing down from the 172% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.31 per share.

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates three times over the last two years.

Looking at Royal Caribbean's peers in the consumer discretionary segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. Carnival delivered top-line growth of 22% year on year, inline with analyst estimates, and Nike reported revenues up 0.3% year on year, exceeding estimates by 1.1%. Carnival traded down 4.1% on the results, Nike was down 7%.

Read our full analysis of Carnival's results here and Nike's results here.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the consumer discretionary stocks have fared somewhat better, they have not been spared, with share price declining 4.1% over the last month. Royal Caribbean is up 0.1% during the same time, and is heading into the earnings with analyst price target of $148.9, compared to share price of $136.9.

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