Trex Company Reports Mixed Q3 Results, Net Sales Decline but Year-to-Date Figures Increase

Trex Company, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance characterized by a decline in quarterly net sales but an increase in year-to-date figures. For the three months ended September 30, 2024, net sales were $233.7 million, a decrease of 23.1% from $303.8 million in the same period of 2023. This decline was attributed to reduced consumer discretionary spending and inventory normalization by channel partners. In contrast, net sales for the nine months ended September 30, 2024, increased by 9.4% to $983.8 million, compared to $899.1 million for the same period in 2023, driven primarily by higher volume from changes in the early-buy program.

Gross profit for the third quarter of 2024 was $93.2 million, down 28.8% from $130.9 million in the prior year, while gross profit for the nine-month period rose to $430.9 million, an increase of 12.9% from $381.8 million in 2023. The gross margin for the third quarter was 39.9%, down from 43.1% in 2023, reflecting increased costs and lower sales volume. Year-to-date gross margin improved to 43.8%, up from 42.5% in the previous year, attributed to higher production levels and continuous improvement initiatives.

Net income for the third quarter of 2024 was $40.6 million, a decrease of 37.9% from $65.3 million in the same quarter of 2023. However, net income for the nine months ended September 30, 2024, increased to $216.6 million, compared to $183.4 million in the same period of 2023, marking an 18.1% rise. Basic earnings per share for the third quarter were $0.37, down from $0.60 in 2023, while year-to-date earnings per share rose to $2.00 from $1.69.

As of September 30, 2024, Trex's total assets increased significantly to $1.27 billion from $932.9 million at the end of 2023, with total liabilities also rising to $379.3 million from $216.2 million. The company reported a substantial increase in cash and cash equivalents, reaching $12.8 million compared to $1.96 million at the end of 2023.

In terms of strategic developments, Trex has continued its capital expenditures, totaling $151.5 million for the nine months ended September 30, 2024, primarily for a new manufacturing facility in Little Rock, Arkansas, which is expected to cost $550 million in total. The company has also initiated a stock repurchase program, repurchasing 822,400 shares as of September 30, 2024.