Trex Company affirms FY25 revenue growth view of 5%-7%

Consensus $1.22B. The company states: “Our first-half results are aligned with the key assumptions underpinning our full-year 2025 guidance – namely, the continued resilience of the Trex consumer, improved demand for entry-level decking products, and double-digit growth in our railing product sales, all within a Repair and Remodel market that is now projected to be below 2024 levels. Over the past 18 months, we have advanced several strategic initiatives that have further strengthened our market leadership – most notably, the launch of new decking products featuring our SunComfortable(TM) technology, the expansion of our industry-leading railing portfolio, and the roll out of our Trex-engineered fastening solutions. These new products, along with our existing portfolio, further establish Trex as a comprehensive, one-stop source for decking, railing, and deck-related hardware – delivering a fully integrated system to builders and consumers. Additionally, our revised inventory strategy reduces the volatility typically associated with channel stocking and de-stocking. By level-loading our production, we can better manage inventory cycles, enhance operational efficiency, and reduce volatility in our quarterly results within the context of a seasonal business. Currently, less than 5% of our cost of sales is projected to be impacted by tariffs, with the majority related to purchases of aluminum and steel used in our railing and fastener products. We believe we have mitigated a meaningful amount of the impact on our cost of sales through strategic actions such as pre-buying, negotiations, and pricing. Looking ahead, we are pleased to reaffirm our full-year 2025 guidance for sales growth of 5% to 7% and adjusted EBITDA margin to exceed 31% amid lower Repair and Remodel spending. We currently expect third quarter sales to range from $295 million to $305 million, and to achieve an estimated 100-basis point sequential expansion in gross margin as the gross margin impact of the Enhance(R) decking refinement subsides, we begin to realize the seasonal benefits from level-loading, and we gain the efficiencies of our continuous improvement projects. Our guidance for the second half of the year assumes considerable net sales and EBITDA growth as compared to the same period in the prior year.”