Trex Earned 53 Cents per Share

After the closing bell, Trex (TREX) reported fiscal Q2 earnings of 53 cents per share. That’s up 29% from last year and it matched Wall Street’s consensus.

Net sales rose 41% to $312 million. Trex had been expecting sales of $295 million to $305 million.

EBITDA rose 36% to $92 million. Trex’s Residential sales increased by 43% to $299 million. This includes a price increase that took effect on January 1.

“Our strong second quarter revenue growth was driven by sustained broad-based demand across all Trex Residential product lines and market share gains from wood. The completion of our $200 million capacity expansion program in May enabled Trex Residential to convert significant customer demand into an impressive 43% increase in sales. Additionally, we are pleased with the success of our tiered product strategy, which supports consumer decision-making by providing a range of product aesthetics, features and price points that have broad appeal and distinct competitive advantages over wood. With the largest part of our capacity expansion behind us, we will now pivot to cost reduction projects and continuous improvement opportunities. These efforts will be focused on automation, modernization, energy efficiency and raw material processing.

“As expected, higher raw material costs and logistic expenses pressured second quarter gross margin. Together with the start-up expenses related to our capacity expansion program, these additional costs reduced gross margin by approximately 400 basis points compared to second quarter 2020. This negative impact was partially offset by robust sales growth in the Residential segment, which resulted in EBITDA growth of 36%. The previously announced price increase that was effective August 1, along with the continued benefits of greater-than-projected productivity experienced in our new Virginia facility, will serve to manage a portion of the inflationary pressures that we have experienced in the first half of this year,” said Bryan Fairbanks, President and CEO.

For Q3, Trex expects sales to range between $320 million and $330 million. The midpoint is 40% growth over last year. Wall Street had been expecting $323.31 million.

Posted by on August 2nd, 2021 at 4:26 pm


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