WINCHESTER, Va. - Trex Company, Inc. (NYSE:TREX), a leader in high-performance, low-maintenance composite decking and railing, reported a robust first quarter with earnings surpassing analyst expectations.
The company announced a first-quarter adjusted EPS of $0.82, which was $0.10 higher than the analyst estimate of $0.72. Revenue for the quarter was also strong at $374 million, beating the consensus estimate of $367.31 million and marking a significant 57% increase compared to $239 million in the same quarter last year.
This performance led to a modest stock rise of 1.2% as the market reacted positively to the results, which were driven by double-digit sell-through for premium products and an Early Buy program.
Bryan Fairbanks, President and CEO, attributed the strong quarter to the appeal of the Outdoor Living category and robust consumer demand for Trex branded products. He also noted that profitability outpaced sales growth due to higher utilization and production efficiencies that more than offset an expected increase in SG&A costs.
Looking ahead, Trex provided guidance for the second quarter with expected revenues between $380 million to $390 million. For the full year 2024, the company reaffirmed its revenue guidance of $1.215 billion to $1.235 billion, which is slightly below the analyst consensus of $1.243 billion.
The EBITDA margin is anticipated to be in the range of 30.0% to 30.5%, representing a 12% year-on-year revenue growth at the midpoint.
Trex's first-quarter net income was $89 million, a significant increase from $41 million in the prior-year quarter. The gross margin expanded to 45.4%, up from 39.6% last year, benefiting from increased capacity utilization and production efficiencies.
Selling, general, and administrative expenses rose to $51 million, or 13.5% of net sales, due to increased branding and marketing program spend for newly launched products, and new product development initiatives.
The company's recent developments and recognitions include an award from Builders FirstSource and listings in Barron's 100 Most Sustainable U.S. Companies and Green Builder Media's Sustainable Brand Leader in the decking category.
Trex was also honored with Good Housekeeping's 2024 Sustainable Innovation Awards and named America's Most Trusted® Outdoor Decking for the fourth consecutive year.
Fairbanks concluded with confidence in the company's strategy to gain market share and expand addressable markets through the development of new ancillary products, including Trex®-branded deck fasteners. He emphasized the company's commitment to investing in marketing, branding, R&D, new product development, and cost-out programs, which have historically yielded substantial returns for Trex.
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