About Arnold Donald
In February 2023, Arnold Donald received the 2023 Lifetime Achiever in Business Award from the St. Louis American Foundation. In a video produced for the event, Donald discussed his background, stating he was born in New Orleans in 1954 during segregation and attended an all-boys Catholic high school. He said he decided in his junior year to become a general manager of a Fortune 100 company, a plan he executed by joining Monsanto, where he spent 23 years and eventually became president of the agricultural company. Donald said he served on Carnival's board for nearly 13 years before being asked by then-chairman Micky Arison to become CEO, a role he accepted because he saw travel as a platform that brings people together.
During the COVID-19 pandemic, Donald stated in a September 2020 interview that the impact on the cruise industry was "absolutely devastating," with zero revenue and no guests. He noted that Carnival had raised over $12 billion in capital markets and emphasized cash conservation. In 2021, Donald reported that bookings were within historical ranges and that there was "pent-up demand" for cruising. He outlined plans for ships to resume operations with enhanced protocols, including PCR testing and isolation areas, and said the company was sailing largely with vaccinated guests. Donald also stated that the company did not require mass layoffs and aimed to financially protect employees at the manager level and below.
Source: AI-verified profile updated from Arnold Donald's recent appearances.
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✨ AI-enhanced transcript with speaker attribution
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Interviewer0:00
Happy holidays to both of you. Happy holidays to you. Not so much for your stock though, big move down. A lot of disappointments around the guidance and just what you're seeing in terms of the consumer environment going forward into next year.
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Arnold Donald0:11
Yeah, it's a brutal day in the market and certainly we've had better days as well. But the reality is, we had a great year: 15% growth in operational performance, and even adjusted for drag from fuel and currency, we grew north of 10% in earnings. Our forecast actually is not softness in consumers. We actually forecasted earnings growth on top of the record that we achieved this year. We also guided to additional return on invested capital growth. We achieved double-digit returns on invested capital this year, so we see a lot of strength. We're well ahead on bookings despite the capacity increases we have. We actually have less to book now than we did same time last year, so actually the market is strong. There was disappointment, I guess the market over-focuses, we feel a little bit, on one lever which is yield, and they were disappointed in our yield guidance. But the reality is our focus is growing earnings. We're gonna, you know, growing is over time, over the next five years, you know, we have clear plans to grow double-digit earnings growth and to continue to grow return on invested capital.
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Interviewer1:26
I know that, and analysts asked a lot about this on the conference call as well, but the whole expectation was more capacity, which you just mentioned, more ships out there should translate into higher growth, and they didn't necessarily get that message from your numbers and for your forecast.
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Arnold Donald1:43
What is higher growth? In earnings and in return on invested capital. Their concern was higher growth, I guess, in yields. And we have nine brands. Those brands run the gamut from, you know, mass contemporary brands like Carnival to ultra-luxury brands like Seabourn. And depending on where the capacity is coming in at a given point in time in the year, and certainly in this time of advance bookings, you can actually have an increase in yield and in capacity in a brand that has the fleet average, you know, which can hold you down a bit in terms of overall average yield for the corporation. Our focus is to grow earnings, to grow earnings at a rapid rate, and to continue to grow return on invested capital. We get that partially through yields, but we also get it through capacity, and there is a shift with more capacity coming out.
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Interviewer2:32
All right, you mentioned that bookings look good, like they're holding up right now. How rapidly can that change? And I ask because your stock is trading at basically the lowest valuation on expected earnings in almost a decade, so the market seems to be expressing some concern about longer-term demand.
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Arnold Donald2:49
I think the market is expressing concern overall, as you can see from the overall market, and we're obviously, you know, party to that and a part of it. For us, we don't see any fall-off in demand. In fact, as I mentioned, we have less to book even with the higher capacity than we have same time last year. Moreover, when you look at our business, you know, we are totally under-penetrated in every key market in the world. We're also kind of, as an industry and in our brands in particular, are somewhat recession-friendly because we're at a deep discount to land-based vacations. And so we're kind of a go-to from a value and definitely a go-to from a great experience.
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Interviewer3:30
Are you seeing more consumers shift toward the value vacations at this point?
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Arnold Donald3:35
No, we're not seeing major shifts. The demand we're creating, we believe we're creating just from great guest experiences and making cruising more aware to the general public and debunking the myths about cruise, whether it's here in the US, whether it's in Europe, any of our source markets, even in China. Well, they don't have any myths about cruising, they're just unfamiliar with it. So we're seeing growth, you know, everywhere. In Europe, which grew some consternation today on the call, the reality is we have double-digit capacity increase and those brands are ahead on bookings and they're gonna grow earnings this year.
