Trex Q3 2023 Earnings Report
Key Takeaways
Trex Company reported strong Q3 2023 results, marked by a significant increase in net sales and gross margin compared to the prior-year quarter. The company's performance was driven by robust consumer demand for Trex products, operating efficiencies, and improved utilization. Trex also raised its full-year revenue and adjusted EBITDA guidance.
Net sales reached $304 million.
Gross margin was 43.1%, or 41.8% excluding a $3.8 million warranty reserve benefit.
Net income was $65 million, with diluted earnings per share of $0.60.
Adjusted EBITDA stood at $96 million, resulting in an adjusted EBITDA margin of 31.5%.
Trex
Trex
Forward Guidance
Trex projects fourth quarter revenues of $185 million to $195 million and expects full year adjusted EBITDA margin to range from 29% to 29.5%.
Positive Outlook
- Full year revenue expected to be $1.09 billion using the mid-point of the guidance.
- Expected to retain position as industry’s greenest and lowest cost manufacturer.
- Benefits from ongoing cost-out programs.
- Future benefits from world class Arkansas facility.
- Expect SG&A spending will represent 15% to 16% of net sales for the year.
Challenges Ahead
- Fourth quarter revenues reflect seasonally low demand.
- Expectation that year-end channel inventories will be below those of year-end 2022.