Trex(US:TREX) Prnewswire·2026-01-22 20:52Core Viewpoint - Hagens Berman is investigating Trex Company, Inc. for potential violations of U.S. securities laws, focusing on undisclosed sales practices and inflated sales figures through overstocking its "pro channel" partners while claiming that its "level-loading" production strategy had stabilized inventory volatility [1][3]. Company Investigation Details - The investigation centers on whether Trex concealed excess inventory buildup at distributors, which may have misled investors regarding the company's sales performance [3]. - Trex's sales growth forecast for 2025 was revised down from +7% to approximately 0%, indicating a significant decline in expected performance [3]. - On November 4, 2025, Trex reported Q3 2025 net sales of $285 million, which was 5% below the midpoint of its guidance and represented a sequential decline of about 26% [4][5]. Market Reaction - Following the disappointing Q3 results and the revised sales outlook, Trex's stock experienced a 31% drop on November 5, 2025, resulting in a market cap loss of approximately $1.5 billion [3][5]. - The company's management had previously assured investors that their inventory strategy would reduce volatility, raising questions about their awareness of softening demand while pushing products into the market [6][7]. Key Metrics - The core metric of concern is the drastic cut in Trex's 2025 sales growth forecast, which was initially projected at 5% to 7% but was later adjusted to flat growth [3][5].