What drove AZEK's gross profit growth in Q3 2024?

AZEK's gross profit growth in Q3 2024 was primarily driven by a combination of factors:

1. **Revenue Growth**: Although there was a slight year-over-year decline in total revenue (-0.1%), the residential segment experienced a strong growth, with a 12% increase in net sales year-over-year. This growth in revenue, despite a slight overall decline, contributed to the gross profit.
2. **Cost Management**: The cost of sales also decreased by 0.1%, which, when coupled with a slight increase in total revenue, improved the gross profit margin. This cost management could be attributed to various operational efficiencies and sourcing strategies implemented by the company.
3. **Segmental Performance**: The residential segment saw a significant boost, with a 33% year-over-year growth in adjusted EBITDA margin, reaching 28.1%. This strong performance in the residential segment, which accounts for 89% of FY23 net sales, contributed substantially to the overall gross profit.
4. **Market Conditions**: The company is positioned well for future market gain, with expectations of an upswing in remodeling spending in 2025. Favorable market conditions and trends in the remodeling and new construction sectors, despite some softness in certain areas, supported AZEK's gross profit growth.

In summary, AZEK's gross profit growth in Q3 2024 was driven by a combination of revenue growth, effective cost management, strong performance in its residential segment, and favorable market conditions.