\nTrex Company, Inc. (NYSE:TREX), the world\u2019s largest manufacturer of high-performance, low-maintenance composite decking and railing products, today announced financial results for the third quarter of 2025.\n<\/p>\n
Third Quarter 2025 Financial Highlights<\/span><\/b><\/p>\n CEO Comments<\/span><\/b><\/p>\n \n\u201cOur leading position in both the pro channel and home centers served us well in the third quarter, and remains a long-term competitive advantage for Trex,\u201d said Bryan Fairbanks, President and CEO. \u201cThis positioning enabled Trex to effectively capture incremental demand across our decking, railing, and accessory product portfolio. While we saw signs of improvement in Repair and Remodel spending as the season began, the second half of the season reflected the weaker market conditions that the industry has experienced in the past two years. This resulted in lower-than-anticipated third quarter sales, and we expect this trend to continue in the seasonally slower fourth quarter. Within this environment, our level-loading program has allowed us to work together with our channel partners to enable them to carry lower inventory levels heading into year-end, and we are adjusting our production accordingly.\n<\/p>\n \n\u201cIn the third quarter we increased our spending on branding and R&D to support future growth. Products launched within the last 36 months accounted for 25% of trailing-twelve-month sales, demonstrating the strong alignment of our new products with consumer preferences, and we have several new launches planned for 2026. Investments in branding and a refreshed marketing campaign have produced significant increases in early purchase intent indicators. Trex\u2019s product sample program and website traffic are both up over 50% year-over-year, and our improved cost calculator is driving higher completion rates and generating double-digit increases in lead generation.\n<\/p>\n \n\u201cGross margin in the quarter benefitted from higher sales volumes and efficiencies from our continuous improvement projects resulting in adjusted EBITDA, which excludes one-time charges, of $90 million, 33% ahead of last year\u2019s third quarter.\u201d\n<\/p>\n Third Quarter 2025 Results<\/span><\/b><\/p>\n \nThird quarter 2025 net sales were $285 million, an increase of 22.1%, compared to $234 million reported in the prior-year quarter.\n<\/p>\n \nGross profit increased 23.9% to $115 million from the $93 million reported last year, and gross margin expanded 60 basis points to 40.5% from 39.9%. Adjusted gross profit, which excludes start-up costs associated with the Company\u2019s Arkansas plastic processing plant of $1.4 million and railing conversion costs of $0.3 million, was $117 million.\n<\/p>\n \nSelling, general, and administrative expenses were $45 million, or 15.8% of net sales, compared to $39 million, or 16.6% of net sales, in the 2024 third quarter, reflecting increased spending on branding and R&D. Excluding $1.8 million related to digital transformation costs and start-up expenses of $0.6 million, SG&A was $43 million, or 15.0% of net sales.\n<\/p>\n \nNet income for the 2025 third quarter increased 27.7% to $52 million, or $0.48 per diluted share, from $41 million, or $0.37 per diluted share, reported in the 2024 third quarter. EBITDA increased 27.2% to $86 million from $68 million, and EBITDA margin expanded 120 basis points to 30.3% from 29.1% in the prior-year period. Excluding the one-time charges incurred in the third quarter, adjusted net income was $55 million, and adjusted diluted earnings per share was $0.51. Adjusted EBITDA was $90 million.\n<\/p>\n Year-to-Date Results<\/span><\/b><\/p>\n \nYear-to-date net sales increased 3.0% to $1.0 billion from $984 million in the year-ago period. Gross profit was $411 million, down 4.6% from $431 million and gross margin was 40.6% compared to 43.8% in the same period in 2024. Adjusted gross profit, which excludes $5.5 million of railing conversion expenses and $2.7 million in start-up expenses, was $419 million.\n<\/p>\n \nSelling, general, and administrative expenses were $157 million, or 15.5% of net sales, compared to $141 million, or 14.3% of net sales, in the year-ago period. Excluding $2.7 million related to digital transformation costs and $2.3 million in start-up expenses, SG&A was $152 million or 15.0% of net sales.\n<\/p>\n \nNet income was $188 million, or $1.75 per diluted share compared to $217 million, or $1.99 per share, reported in the first nine months of 2024. EBITDA was $301 million, down 9.3% from $331 million in the prior year. EBITDA margin was 29.7% compared to 33.7% in 2024. Excluding the one-time charges incurred in the first nine months of this year, adjusted net income was $198 million, and adjusted diluted earnings per share was $1.84. Adjusted EBITDA was $314 million.\n<\/p>\n Summary and Outlook<\/span><\/b><\/p>\n \n\u201cOur year-to-date sales growth of 3% was led by railing sales, which are tracking to double-digit growth for the full year. We now expect, however, that several factors will cause our fourth quarter sales to be below our original expectations. First, we are seeing continuing weakness in the Repair and Remodel sector in what also is the seasonally slowest quarter of the year. In addition, we expect that our distribution partners will manage their end-of-year inventories to lower levels through the end of the year. Thus, we currently expect fourth quarter sales to range from $140 million to $150 million, bringing full-year 2025 sales guidance to $1.15 billion to $1.16 billion, approximately flat with our reported sales in 2024. We have also revised our full-year adjusted EBITDA margin guidance to range from 28.0% to 28.5%.\n<\/p>\n \n\u201cTrex will continue to pursue strategies designed to capture an increasing share of the conversion from wood to composite decking. We plan to include our popular SunComfortable\u2122 heat-mitigating technology in new decking colors to be introduced in 2026, expanding the availability of this popular feature, and driving further market penetration with additional launches. To fully support this accelerated level of activity, we expect that in future periods our annual SG&A spending will return to historical pre-COVID levels of approximately 18% of sales. Also, we expect the mix impact associated with another year of double-digit growth in railing and additional depreciation related to the expansion of our Arkansas facilities will reduce 2026 gross margin by approximately 250 basis points.\n<\/p>\n \n\u201cRecent merger and acquisition activity in both the pro channel and the home centers, together with the expansion of national building product suppliers, has increased the importance of brand recognition and product differentiation to contractors and consumers. As the market leader with the largest and most trusted network of contractors, dealers, distributors, and home centers, and a comprehensive range of products, Trex is positioned to gain the greatest share of the industry\u2019s long-term growth opportunities. Given our strong cash flow generation and our confidence in the Company\u2019s future prospects, the Trex Board of Directors has authorized a $50 million share repurchase program,\u201d Mr. Fairbanks concluded.\n<\/p>\n Third Quarter 2025 Conference Call and Webcast Information<\/span><\/b><\/p>\n \nTrex will hold a conference call to discuss its third quarter 2025 results on Tuesday, November 4, 2025, at 4:30 p.m. ET. To participate on the day of the call, dial 1-844-792-3734, or internationally 1-412-317-5126, approximately ten minutes before the call, and tell the operator you wish to join the Trex Company Conference Call.\n<\/p>\n \nA live webcast of the conference call will be available in the Investor Relations section of the Trex Company website at 3Q25 Earnings Webcast<\/a>. For those who cannot listen to the live broadcast, an audio replay of the conference call will be available within 24 hours of the call on the Trex website. The audio replay will be available for 30 days.\n<\/p>\n Use of Non-GAAP Measures<\/span><\/b><\/p>\n \nThe Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). To supplement our consolidated financial statements reported on a GAAP basis, we provide the following non-GAAP financial measures of adjusted gross profit, adjusted net income and adjusted diluted earnings per share, earnings before interest, income taxes, depreciation and amortization (EBITDA) and EBITDA as a percentage of net sales, EBITDA margin, and adjusted EBITDA and adjusted EBITDA margin. Management believes these non-GAAP financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. Further, management believes these non-GAAP financial measures also enhance investors\u2019 ability to compare period-to-period financial results. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company\u2019s reported results prepared in accordance with GAAP and are not meant to be considered superior to or a substitute for our GAAP results. Our non-GAAP financial measures do not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of these non-GAAP financial measures to GAAP information are included below. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions and in evaluating the Company\u2019s performance. Disclosing these non-GAAP financial measures allows investors and management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance.\n<\/p>\n \nReconciliation of gross profit (GAAP) to adjusted gross profit (non-GAAP) is as follows:\n<\/p>\n\n
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