Trex shares Q3 financial highlights
Trex has reported its financial results for the third quarter of 2024.
Highlights include:
- Net sales of $234 million.
- Gross margin of 39.9 percent.
- Net income of $41 million, and diluted earnings per share of $0.37.
- Trex repurchased 1.6 million shares year-to-date for $100 million.
Year-to-date net sales increased 9 percent to $984 million from $899 million in the year-ago period. Gross profit was $431 million, and gross margin was 43.8 percent, up 13 percent and 130 basis points, respectively, from the $382 million and 42.5 percent during the same period in 2023.
Selling, general and administrative expenses were $141 million, or 14.3 percent of net sales, compared to $134 million, or 14.9 percent of net sales, in the year-ago period.
Net income year-to-date was $217 million, or $1.99 per share, representing 18 percent growth from the $183 million, or $1.69 per share, reported in the first nine months of 2023.
Additionally, the company reports:
- Trex added two new colors to the brand’s Trex Enhance decking line.
- Trex introduced All-In-One Post Kits for its Trex Select and Trex Enhance railing, which come complete with a composite post sleeve, post cap and post skirt, all packaged together.
- The NexTrex Grassroots Movement, which promotes responsible disposal of polyethylene plastic waste and gives it new life composite decking, has experienced a 227 percent increase in participation from eco-minded businesses, municipalities, educational institutions and other organizations across the country.
Third quarter 2024 net sales were $234 million, a decrease of 23 percent compared to $304 million reported in the prior-year quarter. Third quarter sales reflected an approximately $70 million channel inventory reduction.
Gross profit was $93 million, and gross margin was 39.9 percent. Excluding the special warranty benefit recognized in last year’s third quarter, this compares to an adjusted gross profit of $127 million and adjusted gross margin of 41.8 percent in the similar 2023 period. Continued benefits from ongoing cost-out initiatives partially offset the impact of lower utilization.
Selling, general and administrative expenses were $39 million, or 16.6 percent of net sales, compared to $45 million, or 14.7 percent of net sales, in the 2023 third quarter, with the decline primarily resulting from reduced incentive compensation.
Net income for the 2024 third quarter was $41 million.
Trex President Bryan Fairbanks says:
"Our third quarter results were ahead of our expectations led by sustained consumer demand for our premium-priced products, for which we estimate sell-through increased by high-single digits year-on-year and contractor lead time continued to average 6 to 8 weeks. As anticipated, sell-through of our lower-priced products was below last year’s levels, consistent with a pullback in spending by consumers in this segment, although the decline was sequentially stable and less pronounced than we had expected. During the third quarter, our channel partners reduced their inventory levels by approximately $70 million, in line with our expectations and seasonal demand trends."
Click here for more on Trex's financial picture, along with updates regarding its Arkansas plant production.
