- \n
- \nNet sales of $418 million<\/p>\n<\/li>\n
- \nGross margin of 37.9%<\/p>\n<\/li>\n
- \nNet income of $62 million and diluted earnings per share of $0.60<\/p>\n<\/li>\n
- \nAdjusted net income of $63 million<\/p>\n<\/li>\n
- \nAdjusted diluted earnings per share of $0.62, inclusive of $0.03 non-cash write-down<\/p>\n<\/li>\n
- \nAdjusted EBITDA of $112 million<\/p>\n<\/li>\n<\/ul>\n
WINCHESTER, Va.–(BUSINESS WIRE<\/a>)–
\nTrex Company, Inc. [NYSE:TREX], the world\u2019s largest manufacturer of wood-alternative composite decking and railing, and a leader in high-performance, low-maintenance outdoor living products, today announced financial results for the second quarter of 2026.<\/p>\n\n\u201cI\u2019m pleased to report that Trex is delivering strong results from disciplined execution against our strategic priorities. We are returning to stronger top-line growth, while also upgrading our distribution network and accelerating the timing of our Arkansas capacity expansion to further strengthen our market position and drive long-term growth,\u201d said Adam Zambanini, President and CEO. \u201cAt the same time, we are also seeing improved consumer demand trends, with broad-based demand across categories and price points.<\/p>\n
\n\u201cDuring the quarter, we saw particularly strong demand for our entry-level Trex Enhance\u00ae decking, reflecting the success of our marketing efforts to drive conversion from wood to composite decking. Wood conversion remains a key long-term growth opportunity, and the improvement in consumer demand is enabling us to accelerate the ramp-up of decking production in our Arkansas facility by more than six months to the third quarter of 2026. As our most efficient manufacturing site, Arkansas strengthens our ability to serve high-growth Sunbelt markets and supports our strategy to accelerate wood conversion.<\/p>\n
\n\u201cWe also recently enhanced our distribution model. The transition is tracking to plan with inventory levels at distributors already at desired levels.<\/p>\n
\n\u201cTogether, our accelerated Arkansas expansion and upgraded distribution network strengthens our competitive position, supports long-term growth, and advances our goal of achieving $2 billion in annual sales by 2030,\u201d Mr. Zambanini said.<\/p>\n
Q2 2026 Financial Summary<\/span><\/b><\/p>\n
All financial results comparisons made are against the prior-year period unless otherwise noted:<\/i><\/p>\n
\nNet sales increased 8% to $418 million from $388 million in the prior year period, reflecting broad-based strength across product categories, price points, and distribution channels. Growth was driven primarily by volume, with pricing contributing minimally to the increase.<\/p>\n
\nGross profit was $158 million, with gross margin of 37.9%, compared to gross profit of $158 million and gross margin of 40.8% in the prior year period. There were no adjustments to gross profit this quarter. Excluding approximately $2.7 million of adjustments, prior-year adjusted gross profit was $161 million. As anticipated, gross margin was impacted by a higher mix of railing sales, increased depreciation expense associated with the Arkansas facility, and temporary production inefficiencies driven by uneven demand patterns during the quarter, with lower utilization early in the period followed by stronger than expected order activity during the final month, driving increased utilization. We anticipate utilization to improve going forward due to strong order activity in July.<\/p>\n
\nSelling, general, and administrative expenses were $67 million, representing 16.1% of net sales, compared to $56 million, or 14.4% of net sales in the prior year. Excluding digital transformation costs and Arkansas facility start-up expenses of $1.7 million in 2026 and $1.1 million in 2025, SG&A was $66 million compared to $55 million in the prior year period. The increase primarily reflects investments in capabilities and continued investment in branding and marketing programs to accelerate consumer demand and support future growth.<\/p>\n
\nNet income was $62 million, or $0.60 per diluted share, compared to net income of $76 million, or $0.71 per diluted share in the prior year. Adjusted net income was $63 million, with adjusted diluted EPS of $0.62, compared to adjusted net income of $79 million with adjusted diluted earnings per share of $0.73, in the prior-year period. Adjusted EPS includes a negative impact of approximately $0.03 related to a $5 million non-cash write-down of obsolete equipment. Adjusted EBITDA was $112 million, compared to $122 million in the prior year period.<\/p>\n
\nFree cash flow for the quarter was $182 million, reflecting the seasonal benefit of working capital and lower capital expenditures as the Arkansas facility approaches full completion. During the quarter, the Company repurchased approximately $51 million in shares and repaid $130 million outstanding under its revolving credit facility. In July, the Board of Directors approved up to $150 million in share repurchases during the back half of the year, underscoring the Company’s confidence in its outlook, strong cash generation, and commitment to creating long-term shareholder value.<\/p>\n
New Developments & Recognitions<\/span><\/b><\/p>\n
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- \nNamed to TIME\u2019s \u201cAmerica\u2019s Best Companies 2026\u201d list \u2013 the only decking brand recognized \u2013 ranking among the Top 100 Sustainable Engineering, Manufacturing & Medical Technology Companies for excellence in financial performance, employee satisfaction, and sustainability.<\/p>\n<\/li>\n<\/ul>\n
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- \nIncreased brand visibility across premium golf, lifestyle, and outdoor living audiences through sponsorships of the American Century Championship and Golf Channel\u2019s Big Break x Good Good.<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nAnnounced a strategic collaboration with Martha Stewart, featuring Trex products in the renovation of an outdoor space at her Bedford, N.Y., home, to inspire homeowners and reinforce the brand\u2019s leadership in premium, sustainable outdoor living.<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nNamed to USA Today\u2019s \u201cAmerica\u2019s Climate Leaders 2026\u201d list \u2013 the only decking brand recognized \u2013 for measurable progress in reducing greenhouse gas emissions and continued leadership in sustainable manufacturing.<\/p>\n<\/li>\n<\/ul>\n
Summary & Outlook<\/span><\/b><\/p>\n
\n\u201cThe combination of disciplined execution and strengthening consumer demand is translating into improved business performance and greater confidence in our outlook, supporting our recent increase to full-year 2026 net sales and adjusted EBITDA guidance,\u201d said Prith Gandhi, Senior Vice President and CFO.<\/p>\n
\n\u201cAt the same time, the accelerated ramp-up of decking production at our Arkansas facility is strengthening our foundation for future growth. As our most efficient and lowest-cost manufacturing site, Arkansas is expected to become an increasingly important driver of margin expansion as demand grows and utilization increases. The facility also provides critical capacity to support our goal of achieving $2 billion in annual sales by 2030.<\/p>\n
\n\u201cAdditionally, we continue to generate significant free cash flow as our multi-year capital investment program nears completion. This financial strength allows us to reduce leverage while returning capital to shareholders through share repurchases, consistent with our disciplined and balanced capital allocation strategy,\u201d Gandhi concluded.<\/p>\n
\nThe Company is reaffirming its recently raised full year 2026 guidance, shown in the table below, with revenue ranging from $1.215 billion to $1.25 billion and adjusted EBITDA ranging from $335 million to $350 million.<\/p>\n
\nThe Company is also providing third quarter revenue guidance in the range of $305 to $320 million.<\/p>\n
- \nNamed to USA Today\u2019s \u201cAmerica\u2019s Climate Leaders 2026\u201d list \u2013 the only decking brand recognized \u2013 for measurable progress in reducing greenhouse gas emissions and continued leadership in sustainable manufacturing.<\/p>\n<\/li>\n<\/ul>\n
- \nAnnounced a strategic collaboration with Martha Stewart, featuring Trex products in the renovation of an outdoor space at her Bedford, N.Y., home, to inspire homeowners and reinforce the brand\u2019s leadership in premium, sustainable outdoor living.<\/p>\n<\/li>\n<\/ul>\n
- \nIncreased brand visibility across premium golf, lifestyle, and outdoor living audiences through sponsorships of the American Century Championship and Golf Channel\u2019s Big Break x Good Good.<\/p>\n<\/li>\n<\/ul>\n
- \nNamed to TIME\u2019s \u201cAmerica\u2019s Best Companies 2026\u201d list \u2013 the only decking brand recognized \u2013 ranking among the Top 100 Sustainable Engineering, Manufacturing & Medical Technology Companies for excellence in financial performance, employee satisfaction, and sustainability.<\/p>\n<\/li>\n<\/ul>\n
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