Trex stock plummets on disappointing sales outlook

Shares of Trex (TREX) are plummeting after the company issued a disappointing sales outlook, noting "the uncertain economic outlook and the softness in the entry-level segment" in its release.

Market Domination Hosts Julie Hyman and Josh Lipton break down the deck maker's second quarter earnings and how consumer weakness is impacting its outlook.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

Meanwhile, shares of tracks, let's look at that ticker.

They are sinking down over 20% right now.

It's after the deck maker trimmed its sales outlook as it anticipates a reduction in proan inventories and accelerating weakness in entry level product sales.

So uh stock is just nose diving here.

Julie uh Decking company lowers its revenue outlook now looking for revenue for the year between 1.13 and 1.15 billion.

Um That is down from 1.22 to 1.24 billion just playing right off.

What Sassi said, by the way, I thought some of the commentary from executives that highlights this theme, right?

Um They say premium product sales continue to out perform, but they say sales of lower price product lines were below expectations consistent with the recent data they say indicating low than anticipated purchasing by consumers in this segment.

We expect additional softness in this market in the second half of the year.

Well, what's interesting is Brian Fairbanks on the call.

The CEO talked about that they have sort of three tiers of their products and he's come out and talked with us before about treks composite decking and that they do have these three sort of tiers.

So he said, basically what happened is that you have the weakness on the lower end.

He said the middle range and the higher end up until June had been holding up.

And then as they got into June and July, he said, we started to see those mid level customers um starting to struggle and starting to pull back as well.

So moving up the value chain, the income chain that weakening starting to creep in there.

So again, I think it's, it's gonna be if we don't, we start to get more um earnings reports from retailers next week, we'll get Home Depot next week, then it accelerates into the end of the month and we're gonna have to watch them really closely to get more on these themes.

Yeah.

And also reacting by the way, team at Stevens downgrades this name talking about the sudden steep and potentially prolonged, slow down.

It looks like at least some investors are great today for sure.