Trex Company Reports Mixed Financial Results for Q2 and First Half of 2025

Trex Company, Inc. reported its financial results for the second quarter and first half of 2025, revealing a mixed performance compared to the same periods in 2024. For the three months ended June 30, 2025, net sales reached $387.8 million, a 3% increase from $376.5 million in the prior year. However, net income declined by 12.7% to $75.9 million, down from $87.0 million, resulting in diluted earnings per share of $0.71, compared to $0.80 in the previous year. For the six-month period, net sales decreased by 3% to $727.8 million from $750.1 million, while net income fell 22.6% to $136.3 million from $176.1 million.

The company's gross profit for the second quarter was $158.1 million, down 5.9% from $168.1 million, with a gross margin of 40.8%, a decrease from 44.7% in the prior year. This decline was attributed to lower production levels and inefficiencies related to the startup of the new Arkansas manufacturing facility. Selling, general, and administrative expenses also increased by 8.8% to $55.7 million, driven by higher branding costs and personnel expenses. The effective tax rate for the quarter was 25.9%, slightly higher than the previous year's 25.6%.

In terms of operational developments, Trex has continued to invest in its growth, with capital expenditures totaling $126.3 million in the first half of 2025, primarily for the Arkansas facility and capacity expansion initiatives. The company reported a significant increase in cash provided by operating activities, amounting to $95.7 million, compared to $19.6 million in the same period last year. This improvement was largely due to a decrease in inventories, reflecting a strategic shift in channel inventory management.

Trex's balance sheet showed total assets of $1.54 billion as of June 30, 2025, up from $1.32 billion at the end of 2024. The company had $245.4 million in borrowings under its revolving credit facility, with an available borrowing capacity of $304.6 million. Trex remains compliant with its debt covenants and continues to focus on maintaining liquidity to support its capital expenditure plans and operational needs.

Looking ahead, Trex anticipates continued challenges in the market, including fluctuations in consumer demand and potential impacts from economic conditions. The company plans to focus on enhancing its product offerings and expanding its market presence while managing costs effectively. The outlook for the remainder of 2025 will depend on the successful execution of its strategic initiatives and the overall health of the construction and home improvement sectors.