Trex Company reports Q3 EPS 57c, consensus 50c

Reports Q3 revenue $304M, consensus $289.9M. “The third quarter was another quarter of strong results as underlying consumer demand for Trex products, together with operating efficiencies and improved utilization, drove robust performance across all key financial metrics. Channel sell-through growth remained at mid-single-digit levels. Revenue growth benefitted from the success of new product launches and ongoing brand and marketing investments that educate consumers on the value proposition of converting from wood to Trex decking and railing products. Our recently launched premium Trex Transcend(R) Lineage(TM) and Trex Signature(R) decking lines have been favorably received in the marketplace and recognized for their respective attributes: Lineage’s refined look and heat-mitigating technology and Signature’s authentic aesthetics that replicate the graining and color richness of tropical hardwoods. We also gained traction with Trex Select(R) T-Rail, our high-performance, low-maintenance composite rail system that is priced to compete with low-cost vinyl railing systems,” said Bryan Fairbanks, CEO. “Higher sales volume, increased utilization rates and the benefits from our investments in production efficiencies drove a significant improvement in gross margin in the third quarter and again demonstrated our ability to achieve strong performance on less-than-full capacity. Our return to normalized brand spending is showing returns as the market continues to demonstrate mid-single digit sell through growth, despite economic uncertainties. During the quarter the Company achieved an adjusted EBITDA margin of 31.5%. Year-to-date results reflect the resilience of consumer demand for Trex products and the strength of the outdoor living category. With a full range of product offerings in decking, railing and complementary accessories, we have and will continue to expand our addressable market, positioning Trex for continued long term growth and profitability.”