third quarter of 2026
Filed Nov 4, 2026Trex Company Reports Strong Third Quarter 2026 Results, Delivering Back-To-Back Record Quarters
Net sales increased 26.0% to $360 million, adjusted EBITDA increased 10% to $100 million, free cash flow was $135 million, and the Company raised full-year 2026 revenue and adjusted EBITDA guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30, 2026GAAP | $359.5M | – | 26.0% |
| Net sales, nine months ended September 30, 2026GAAP | $1.12B | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $129.5M | – | – |
| Gross margin, third quarter 2026GAAP | 36.0% | – | – |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $132.7M | – | – |
| Adjusted gross margin, third quarter 2026non-GAAP | 36.9% | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $426.8M | – | – |
| Adjusted gross profit, nine months ended September 30, 2026non-GAAP | $430.0M | – | – |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | $56.45M | – | – |
| Selling, general and administrative expenses as percentage of net sales, third quarter 2026GAAP | 15.7% of net sales | – | – |
| Adjusted SG&A, third quarter 2026non-GAAP | $55M | – | – |
| Selling, general and administrative expenses, nine months ended September 30, 2026GAAP | $179.5M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $72.52M | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $242.2M | – | – |
| Net income, three months ended September 30, 2026GAAP | $52.49M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $175.8M | – | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $0.52 | – | – |
| Diluted earnings per common share, nine months ended September 30, 2026GAAP | $1.70 | – | – |
| Adjusted net income, three months ended September 30, 2026non-GAAP | $55.66M | – | – |
| Adjusted net income, nine months ended September 30, 2026non-GAAP | $181.2M | – | – |
| Adjusted diluted earnings per share, three months ended September 30, 2026non-GAAP | $0.55 | – | – |
| Adjusted diluted earnings per share, nine months ended September 30, 2026non-GAAP | $1.76 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $99.51M | – | 10% |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $314.6M | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $152.6M | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | $134.6M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $248.4M | – | – |
| Expenditures for property, plant and equipment, nine months ended September 30, 2026GAAP | −$69.37M | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $3.27M | – | – |
| Line of credit, September 30, 2026GAAP | $170M | – | – |
| Total assets, September 30, 2026GAAP | $1.57B | – | – |
| Total liabilities, September 30, 2026GAAP | $557.2M | – | – |
| Total stockholders' equity, September 30, 2026GAAP | $1.01B | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full Year 2026 and Q4 2026 outlook
- RevenueFull Year 2026 Net sales: $1,296M to $1,306M; Q4 2026 Net Sales: $175M to $185M
- Operating expensesAdjusted SG&A: ~17% of net sales
- Tax rateEffective tax rate: 26.0% to 27.0%
- NoteAdjusted EBITDA: $355M to $360M
- NoteDepreciation and amortization: ~$85M
- NoteInterest expense: $4M to $6M
- NoteCapEx: ~$100M
Capital returns
- During the quarter, the Company repurchased approximately 1.2 million shares for $55 million.
- The Company anticipates completing its Board-authorized $150 million share repurchase program by year-end.
- The Company expects total share repurchases during 2026 of approximately $300 million.
- Repurchases of common stock were $(208,634) (In thousands) for the nine months ended September 30, 2026, compared to $(4,033) (In thousands) in the prior-year period.
What drove it
- Net sales growth reflected broad-based volume growth led by the Trex Enhance product line.
- The Company estimated that approximately $30 million in revenue came from initial distribution load-in.
- Management cited strong consumer demand, wood conversion strategy execution, and ongoing market share gains.
- Growth was described as overwhelmingly volume-driven, with minimal benefit from pricing.
- The Company completed inventory placements with new and expanded distribution partners while inventory held by its former distribution partner continued to be reduced.
- The Arkansas facility remains on track to have approximately 50% of its existing decking production capacity operational by year-end.
Concerns
- Gross margin was 36.0%, compared to 40.5% in the prior-year period.
- Gross margin was affected by higher transportation-related input costs associated with increased diesel prices and higher depreciation from recent capacity investments.
- Arkansas startup costs were higher than anticipated during the quarter due largely to certain mechanical issues, though the Company said the issues have been resolved.
- Selling, general and administrative expenses increased to $56 million from $45 million, reflecting investments in people, capabilities, and brand-building initiatives.
- Management stated that the broader market environment remains mixed.
What to watch
- Completion of the Board-authorized $150 million share repurchase program by year-end.
- Progress toward approximately 50% of existing Arkansas decking production capacity being operational by year-end.
- Moderation of Arkansas startup-related costs as production volumes increase.
- Fourth-quarter net sales against guidance of $175M to $185M.
- Delivery of full-year net sales of $1,296M to $1,306M and adjusted EBITDA of $355M to $360M.
- Execution of the enhanced distribution strategy and the level of channel inventory during the transition.
Balance sheet and cash flow
- Cash and cash equivalents were $3,271 (In thousands) at September 30, 2026, compared to $3,807 (In thousands) at December 31, 2025.
- Line of credit was $170,000 (In thousands) at September 30, 2026, compared to $133,500 (In thousands) at December 31, 2025.
- The Company repaid $83 million outstanding under its revolving credit facility during the quarter.
- Free cash flow for the quarter was $135 million, reflecting strong operating performance, seasonal working capital benefits, and lower capital expenditures.
- Accounts receivable were $222,914 (In thousands) and inventories were $181,189 (In thousands) at September 30, 2026.
- Net cash used in investing activities was $(75,233) (In thousands) for the nine months ended September 30, 2026, compared to $(188,136) (In thousands) in the prior-year period.
Analysis
Trex reported strong third-quarter growth, with net sales increasing 26.0% to $360 million from $285 million. Management attributed the increase to broad-based volume growth led by Trex Enhance, strong consumer demand, wood conversion strategy execution, and market share gains. The Company estimated that approximately $30 million of revenue came from initial distribution load-in. Management characterized growth as overwhelmingly volume-driven with minimal pricing benefit.
Profitability expanded in dollar terms but margin performance weakened. Gross profit increased to $129 million from $115 million, while gross margin declined to 36.0% from 40.5%. Adjusted gross profit was $133 million compared with $117 million. Higher diesel-related transportation input costs, higher depreciation from capacity investments, and higher-than-anticipated Arkansas startup costs weighed on gross margin. Adjusted EBITDA increased 10% to $100 million from $90 million, while adjusted diluted earnings per share rose to $0.55 from $0.51.
The Arkansas facility remains a central operational focus. The Company said a temporary mechanical issue caused operational inefficiencies and higher startup costs during the quarter, but said the issue has been resolved. Arkansas is expected to have approximately 50% of its existing decking production capacity operational by year-end. Trex expects the facility to support margin expansion over time through manufacturing efficiency, lower logistics costs, and closer proximity to Sunbelt growth markets.
Cash generation and capital allocation remained active. Free cash flow was $135 million for the quarter, supported by operating performance, seasonal working capital benefits, and lower capital expenditures as Arkansas construction approaches completion. Trex repurchased approximately 1.2 million shares for $55 million and repaid $83 million under its revolving credit facility. The Company raised full-year guidance to net sales of $1,296M to $1,306M and adjusted EBITDA of $355M to $360M, while guiding fourth-quarter net sales to $175M to $185M.
The key items for the remainder of 2026 are delivery against the raised outlook, Arkansas ramp execution and startup-cost moderation, and continued distribution transition performance. Management said overall channel inventory remained comparable to the prior year despite selected partner inventory increases during the transition. The release also highlighted a mixed broader market environment, making the durability of Trex-specific demand, contractor engagement, consumer interest, and market share gains important operating indicators.
Management, verbatim
We delivered an exceptional third quarter as we successfully executed our enhanced distribution strategy, began the ramp-up of our Arkansas manufacturing facility, generated record third quarter revenue, and again increased our full-year outlook.
Adam Zambanini, President and CEO
We believe our underlying performance was driven primarily by Trex-specific initiatives and continued market share gains rather than any meaningful improvement in broader end-market conditions.
Adam Zambanini, President and CEO
We are pleased to raise our full-year guidance, reflecting the strength of our year-to-date execution, continued demand for our products, and confidence in our strategic growth initiatives.
Prith Gandhi, Senior Vice President and CFO
Not in the filing
stated, not guessed- No reportable segment revenue, segment profit, or segment-level growth metrics were provided.
- No dividend declaration or dividend payment information was provided.
- No quarterly operating cash flow margin, free cash flow margin, operating margin, or net income margin was provided.
- No prior-quarter comparative figures were provided for the reported income-statement metrics.
- No prior outlook section was provided, so comparison of actual results with prior guidance is unavailable.
- No forward-looking gross-margin guidance was provided.
- No quarterly balance-sheet debt maturity schedule was provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.