Core Insights - Trex Company, Inc. has strengthened its partnership with Boise Cascade Company, becoming the exclusive brand of composite decking and railings sold through participating Boise locations nationwide [1] - The company has significantly expanded its product offerings, filling product gaps and developing a well-structured portfolio to enhance competitiveness in key decking and railing categories [2] - Trex's distribution network is robust, with products available in over 6,700 retail outlets across six continents [2] Product Development - Trex has expanded its decking portfolio with new products such as Trex Signature and Trex Transcend Lineage, along with a full collection of Trex-branded deck fasteners [3] - The company has introduced a wide range of new railing profiles and materials, making its collection the largest and most diverse in the category [3] - Recent innovations include steel, mesh, and aluminum railing systems, as well as heat-mitigating technology in new decking colors, aligning with consumer preferences [5] Financial Performance - Trex's stock has gained 11.3% in the past month, outperforming the Zacks Building Products - Wood industry's growth of 4.3% [4] - The Zacks Consensus Estimate for 2024 indicates a 4.3% growth in sales and a 10.2% growth in earnings per share (EPS) year-over-year [5] - The company has delivered a trailing four-quarter earnings surprise of 9% on average [5] Market Position - Trex aims to double its share of the railing market within five years, supported by its product expansion strategy [5] - The company currently holds a Zacks Rank of 3 (Hold) [6]

Core Insights - Trex's stock has experienced significant volatility over the past year, fluctuating from $60 to $100 and back to around $70 [1] Group 1: Stock Performance - The stock price of Trex has seen a notable increase and decrease, indicating a rollercoaster ride for investors [1] Group 2: Investment Philosophy - The investment strategy focuses on achieving returns that exceed the historical S&P return of 7-8% per year, emphasizing a GARP (Growth at a Reasonable Price) approach [2] - The analysis is primarily centered on consumer discretionary stocks, with occasional coverage of tech stocks when the business model is understood [2] - The process of researching companies includes analyzing financial statements, listening to earnings calls, and reviewing Investor Relations websites to develop a comprehensive investment thesis [2]

For Immediate Release Chicago, IL – October 30, 2024 – Today, Zacks Equity Research like Trex Company, Inc. (TREX) , LouisianaPacific Corp. (LPX) and JELD-WEN Holding, Inc. (JELD) . Industry: Building Products - Wood Link: https://www.zacks.com/commentary/2359424/3-wood-stocks-to-navigate-challenging-industry-landscape Spending on home repair and remodel (R&R) activities has decreased from the peaks seen during the pandemic, given high rates. Higher mortgage rates have resulted in a substantial number of po ...

Trex (TREX) came out with quarterly earnings of $0.37 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to earnings of $0.57 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 15.63%. A quarter ago, it was expected that this maker of fencing and decking products would post earnings of $0.79 per share when it actually produced earnings of $0.80, delivering a surprise of 1.27%. Over the last four qua ...

The market expects Trex (TREX) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on October 28, 2024, might help the stock move higher if these key numbers are bett ...

WINCHESTER, Va., Aug. 21, 2024 (GLOBE NEWSWIRE) -- In a world increasingly focused on sustainability, Trex Company [NYSE:TREX] is committed to doing its part to tackle America's growing plastic waste problem. Through the NexTrex® Grassroots Movement, Trex works together with eco-minded businesses, municipalities, educational institutions and other organizations across the country to responsibly dispose of polyethylene (PE) plastic waste and give it new life as beautiful, durable and environmentally friendly ...

Core Viewpoint - Trex reported an earnings beat due to cost controls, but the weak forecast for future demand has led to a significant drop in stock price, down 21% post-earnings [1] Group 1: Financial Performance - Trex earned $0.80 per share, exceeding the consensus estimate of $0.78 per share, but revenue of $376 million fell short of the expected $388 million [3] - The company experienced an 80-point expansion in gross margin to 44.7%, contributing to the earnings beat [4] - For the third quarter, Trex guided revenue between $220 million to $230 million, significantly below the $290 million consensus [4] - For the full year, Trex expects sales of $1.13 billion to $1.15 billion, compared to the $1.24 billion consensus estimate [4] Group 2: Market Conditions - Trex operates in the composite decking and wood alternatives market, which is closely tied to the housing and remodeling industries [2] - The company is facing challenges due to a tough housing market and higher inflation affecting consumer spending [3] - There is uncertainty regarding consumer health, which may impact demand for Trex's higher-priced products compared to wood alternatives [6] Group 3: Management Commentary - CEO Bryan Fairbanks indicated a cautious approach to adjusting sales guidance due to the uncertain economic outlook and softness in the entry-level segment [5] - Despite current challenges, Trex is viewed as an attractive long-term investment for patient investors willing to wait for a market rebound [7]

Financial Data and Key Metrics Changes - In Q2 2024, net sales were $376 million, a 6% increase from $357 million in Q2 2023 [13] - Net income rose to $87 million or $0.80 per diluted share, up 13% from $77 million or $0.71 per diluted share a year ago [15] - EBITDA increased by 11% to $130 million, representing 34.6% of net sales, compared to $117 million or 32.8% of net sales in the previous year [15] - Year-to-date net sales for the first half of 2024 totaled $750 million, a 26% increase compared to $595 million in the first half of 2023 [16] - Gross margin improved to 44.7%, an 80 basis point increase from 43.9% in Q2 2023 [14] Business Line Data and Key Metrics Changes - Premium product sell-through grew at a double-digit rate, while entry-level product sales were below expectations [6][14] - The introduction of new products, such as Trex Transcend Lineage decking and Trex Signature lines, has been successful in appealing to higher-income consumers [6][8] - The Trex Select T-Rail product has gained market acceptance, leading to dealer and contractor conversions [8] Market Data and Key Metrics Changes - The company anticipates a decline in sales due to accelerated weakness in the entry-level product category and reduced pro channel inventories [11] - Approximately 60% of the projected sales decline is attributed to channel inventory reductions, with the remainder due to softness in low-end products [11] - The outdoor living category remains more resilient than the general repair and remodel market, with Trex positioned to benefit from long-term growth drivers [12] Company Strategy and Development Direction - New product introductions are a strategic priority to drive future growth, with a focus on offering better options than competitors [8] - The company aims to increase penetration in the $3.3 billion railing market and has launched new premium railing products [9] - Trex is committed to sustainability and has published its 2023 sustainability report, highlighting its efforts in circularity and community engagement [20] Management's Comments on Operating Environment and Future Outlook - Management noted that despite current economic uncertainty and consumer spending weakness, Trex is well-positioned for long-term success [12] - The company expects Q3 sales to range from $220 million to $230 million, with slight gross margin deterioration anticipated [19] - Management remains optimistic about the long-term demand for Trex products, driven by the aging decks in the U.S. and the trend of converting wood decks to composite [12][13] Other Important Information - Year-to-date operating cash flow was $20 million, a decrease from $108 million in 2023, primarily due to increased accounts receivable and inventory levels [17] - The company invested $73 million in capital expenditures related to the Arkansas manufacturing facility, which is on track for production startup in the first half of 2025 [17] Q&A Session Summary Question: Can you provide additional color on sell-through in the second half given channel destocking? - Management indicated that sell-through declined to a low single-digit in Q2 and expects a low single-digit decline in Q3 and a high single-digit decline in Q4, primarily due to channel inventory adjustments [22][23] Question: What is the company's willingness to continue ramping investments in new products? - Management affirmed that they will continue to pursue new markets and product investments despite the current operating environment [24] Question: Is there pressure on pricing, particularly at the low end? - Management noted that there has not been significant pricing pressure, and they have not seen deflationary factors affecting their business [38] Question: How is the company addressing inventory levels? - Management acknowledged elevated inventory levels due to new product rollouts and indicated a willingness to hold more inventory to service the market effectively [62] Question: What indicators suggest continued deceleration in sell-through into Q4? - Management mentioned tracking web metrics that indicated weakness starting in mid-June, which correlated with overall market performance [66]

Trex (TREX) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.79 per share. This compares to earnings of $0.71 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 1.27%. A quarter ago, it was expected that this maker of fencing and decking products would post earnings of $0.72 per share when it actually produced earnings of $0.82, delivering a surprise of 13.89%. Over the last four qua ...

WINCHESTER, Va., July 24, 2024 (GLOBE NEWSWIRE) -- When it comes to deck railings, cable and glass are among the hottest styles with today's homeowners but also among the most difficult to specify –until now. Trex Company [NYSE: TREX], the world's largest manufacturer of high-performance, low-maintenance composite decking and railing, and a leading brand of outdoor living products, has expanded its popular Trex Signature® Railing line with the introduction of X-Series™ Cable Rail and X-Series™ Frameless Gla ...