Yahoo Finance TREX Q1 Earnings & Net Sales Beat Estimates, Margins Up
Trex Company, Inc. TREX reported impressive first-quarter 2024 results, wherein earnings and net sales surpassed their respective Zacks Consensus Estimate.
On a year-over-year basis, earnings and net sales increased handily on the back of continued appeal of the Outdoor Living category and demonstrating strong consumer demand for Trex branded products.
Shares of TREX, the world’s #1 brand of high-performance, low-maintenance and eco-friendly composite decking and railing and a leading brand in outdoor living products, gained 1.1% in the after-hour trading session on May 9.
Detailed Discussion
Trex reported adjusted earnings per share (EPS) of 82 cents, which beat the Zacks Consensus Estimate of 72 cents by 13.9%. The bottom line increased a whopping 115.8% from the year-ago quarter’s reported figure of 38 cents per share.
Trex Company, Inc. Price, Consensus and EPS Surprise
Trex Company, Inc. price-consensus-eps-surprise-chart | Trex Company, Inc. Quote
Net sales of $374 beat the consensus estimate of $366 million by 2% and rose 57% from the prior year’s figure. This was backed by the shift of the Early Buy season from the fourth quarter of 2023, the channel recalibrating inventories to prepare for the seasonal demand and increased consumer demand. Total sell-through increased at a mid-single-digit rate in the first quarter.
Gross profit was $170 million in the quarter, up 80% year over year. Gross margin of 45.4% was also up 580 basis points compared with the year-ago period. Gross margin benefited from a combination of increased capacity utilization along with related production efficiencies and continued implementation of the cost improvement initiatives.
Selling, general and administrative expenses were 13.5% of net sales compared with 15.7% generated a year ago due to the accelerated branding and marketing program spend for newly launched products and new product development initiatives.
Adjusted EBITDA of $133 million was up from $69 million reported in the prior-year quarter. Adjusted EBITDA margin was 35.6% compared with 28.8% in the prior-year period.
Financials
As of Mar 3, 2024, the company had cash and cash equivalents of $3.05 million compared with $1.96 million at 2023-end. Long-term debt was $16.56 million, flat from the 2023-end level.
For the first quarter, net cash used in operations was $174 million, up from $115.5 million reported a year ago.
Guidance
Backed by the Early Buy program, completed in the first quarter, the company expects second-quarter sales in the range of $380-$390 million versus $357 million a year ago.
For the year, it expects revenues in the $1.215-$1.235 billion range, representing year-over-year growth of 12% at the midpoint. EBITDA margin is anticipated within 30%-30.5% versus 29.8% reported in 2023.
Zacks Rank & Recent Construction Releases
Trex currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Louisiana-Pacific Corporation LPX, or LP, reported impressive first-quarter 2024 results. Earnings and net sales beat their respective Zacks Consensus Estimate and increased on a year-over-year basis.
The impressive first-quarter 2024 performance was primarily propelled by several key factors. Notably, there was a notable surge in demand for Siding and OSB, highlighted by a significant increase in volume.
UFP Industries, Inc. UFPI reported mixed results for the first quarter of 2024. Earnings beat the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines declined on a year-over-year basis. Lower pricing and organic unit sales hurt the company’s quarterly results.
UFPI’s adjusted EBITDA of $180.8 million declined 10.5% year over year. Adjusted EBITDA margin also contracted 10 bps from the prior year to 11%.
Boise Cascade Company BCC reported solid first-quarter 2024 results, wherein earnings and sales topped the Zacks Consensus Estimate and increased year over year. The uptrend in the company’s results was attributable to the seasonal tailwinds and strength in new single-family housing starts, resulting in sales volume growth. These factors aided the increased contributions from BCC’s two reportable segments.
BCC remains optimistic about the increasing trajectory of single-family housing starts, given the low supply of existing single-family homes, as this metric is the key driver of its sales. Also, it aims to effectively allocate its capital and ensure shareholder value, along with fostering its growth.
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