Trex (TREX) Tops Q2 EPS by 16c, Offers Guidance, Plans 2-for-1 Split

Trex (NYSE: TREX) reported Q2 EPS of $0.81, $0.16 better than the analyst estimate of $0.65. Revenue for the quarter came in at $221 million versus the consensus estimate of $200.73 million.

GUIDANCE:

Trex sees Q3 2020 revenue of $215-225 million, versus the consensus of $193.9 million.

“First half results give us confidence that 2020 will be another year of strong growth for Trex. Additionally, market leadership, brand recognition and strong channel partnerships have enabled Trex to gain share from the large wood market as consumers increasingly recognize the benefits of Trex composite products. This gain has accelerated with the launch of Enhance decking products that have narrowed the price gap between composites and wood.

“Our $200 million capital expansion program is progressing on schedule and will enable us to meet continued demand growth. We started three new production lines in our Nevada facility late in the second quarter and will continue to deploy our strong operating cash flow to build out our new Virginia facility, which is scheduled to start coming online early in the first quarter of 2021.

“For the third quarter of 2020, we expect consolidated net sales of approximately $215 million to $225 million, representing 13% year-over-year growth at the midpoint. With improved clarity in the market, we are again able to provide full year financial guidance. We expect full year 2020 incremental gross margin to be 45% to 50% inclusive of additional COVID-19 related expenses, full year SG&A as a percentage of sales to improve by 80 to 100 basis points compared to the prior year, a full year tax rate of approximately 25% and full year capital spending of $150 million to $170 million.

“Reflecting our continued positive outlook, the Trex Board of Directors has approved a 2-for-1 stock split of the Company’s common shares. The stock split will be in the form of a stock dividend to be distributed on September 14, 2020 to shareholders of record at the close of business on August 19, 2020,” Mr. Fairbanks concluded.

For earnings history and earnings-related data on Trex (TREX) click here.

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