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Jun 30, 2020
Trex Q2 2020 Earnings Report
Trex experienced continued demand for residential decking and railing products, leveraging operating efficiencies through expanded gross margin and lower SG&A expenses.
Key Takeaways
Trex Company reported a 7% increase in consolidated net sales, reaching $221 million. The company's gross margin expanded to 41.9%, and earnings per diluted share increased by 33% to $0.81.
Consolidated net sales increased 7% to $221 million.
Consolidated gross margin of 41.9%, up 150 basis points.
EBITDA margin of 30.6%, up 580 basis points.
Consolidated earnings per diluted share of $0.81, up 33%.
Trex
Trex
Trex Revenue by Segment
Revenue by Segment
Trex Residential Revenue
CapyFin.com Forward Guidance
For the third quarter of 2020, Trex expects consolidated net sales of approximately $215 million to $225 million, representing 13% year-over-year growth at the midpoint.
Positive Outlook
- Trex expects full year 2020 incremental gross margin to be 45% to 50% inclusive of additional COVID-19 related expenses.
- Full year SG&A as a percentage of sales to improve by 80 to 100 basis points compared to the prior year.
- A full year tax rate of approximately 25%.
- Full year capital spending of $150 million to $170 million.
- Trex Board of Directors has approved a 2-for-1 stock split of the Company’s common shares.
Challenges Ahead
- The extent of market acceptance of the Company’s current and newly developed products.
- The costs associated with the development and launch of new products and the market acceptance of such new products.
- The sensitivity of the Company’s business to general economic conditions.
- The impact of seasonal and weather-related demand fluctuations on inventory levels in the distribution channel and sales of the Company’s products.
- Material adverse impacts from global public health pandemics, including the strain of coronavirus known as COVID-19.