What does Trex do and what are its main business segments?

Did Trex beat or miss consensus estimates last quarter?

What is Trex's gross profit margin?

What guidance did Trex's management provide for the next earnings period?

What is the market's earnings forecast for Trex next quarter?

What factors drove the changes in Trex's revenue and profit?

What were the key takeaways from Trex’s earnings call?

What were the key takeaways from Trex's earnings call?

- **Q3 Strong Performance**: $285M revenue (+22% YoY), 40.5% gross margin, $90M EBITDA. 
- **2025 Guidance Adjustment**: Full year sales flat vs 2024, Q4 sales $140-150M. 
- **2026 Challenges**: 250bps gross margin headwind from Arkansas depreciation, 18% SG&A as % of sales. 
- **Share Buyback**: $50M program announced amid $188M YTD operating cash flow. 
- **Market Risks**: Channel destocking, competitive advertising, and economic uncertainty.

**【CEO Summary Section】**
- Q3 revenue of $285M (+22% YoY), driven by double-digit growth in railing and new product launches (25% of trailing 12M sales). 
- Gross margin expanded 60bps to 40.5% due to production efficiencies and lower labor costs. 
- Adjusted EBITDA rose 33% to $90M, despite $2.4M in one-time costs for Arkansas facility and digital transformation. 
- 2025 full year net sales guidance revised to $1.15-1.16B (flat vs 2024), with Q4 sales expected at $140-150M due to channel destocking and seasonal weakness. 
- 2026 outlook: 250bps gross margin headwind from Arkansas depreciation and mix shift, offset by continuous improvement initiatives. 
- $50M share buyback program announced, with $188M in operating cash flow YTD. 

**【CFO Financial Commentary】**
- Q3 GAAP net income: $52M ($0.48 EPS), +28% YoY. Adjusted net income: $55M ($0.51 EPS). 
- SG&A expenses rose to 17.8% of sales ($45M) due to branding investments, vs 16.6% in 2024. 
- 2025 capex: $210-220M for Arkansas expansion, with $40-50M remaining in 2026. 
- 2026 guidance: 18% SG&A as % of sales, 28-28.5% EBITDA margin, and 26% effective tax rate. 

**【Q&A Key Highlights】**
- **Market Softness**: Q3 sell-through slowed after July, with channel partners reducing inventories. Full year sell-through expected at low single digits vs prior 5-7% guidance. 
- **Marketing Spend**: 2026 SG&A to rise to 18% of sales to support new product launches and counter competitive advertising. 
- **Arkansas Facility**: $40-50M in remaining capex for 2026, with depreciation driving 250bps margin headwind. 
- **Competitive Landscape**: Increased M&A activity in pro channel and home centers, with competitors stepping up marketing spend. 
- **2026 Outlook**: Early Buy Program expected to be similar to prior years, with focus on Arkansas production efficiency. 
- **Share Repurchases**: $50M buyback program to begin in Q4, depending on market conditions.

Trex Company, Inc. (TREX) Q3 2025 Earnings Call Transcript

Revenue

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Operating Expenses

Selling, General and Administrative Expenses

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TREX

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