Trex Company, Inc. reported fourth‑quarter 2025 net sales of $161.1 million, down 4% from $168 million in the same period a year earlier, while full‑year 2025 net sales reached $1.17 billion, a 2% increase over $1.15 billion in 2024. Adjusted earnings per share for the quarter were $0.04, a $0.05 beat on the consensus estimate of a loss of $0.01. Adjusted EBITDA for the year was $336 million, down from $377 million in 2024. Gross profit for Q4 2025 was $49 million, giving a gross margin of 30.2%, compared with 42.3% in Q4 2024. For the full year, gross profit was $460 million, resulting in a gross margin of 39.2%, versus 42.2% in 2024.
The earnings beat was driven by a mix of cost discipline and product‑mix gains. Management highlighted that higher‑margin railing sales grew double‑digit in the quarter, offsetting softness in the repair‑and‑remodel market. New product launches accounted for 24% of full‑year sales, up from 18% the prior year, and helped lift overall revenue beyond the $143.36 million consensus estimate. The $0.04 adjusted EPS beat was largely attributable to disciplined operating costs and the favorable shift toward higher‑margin railing products, which mitigated the impact of a 30.2% gross‑margin contraction in Q4.
Margin compression in Q4 2025 was largely a result of Trex’s transition from LIFO to FIFO inventory accounting, which increased reported cost of goods sold, and higher raw‑material costs. The company also noted that depreciation related to its new Arkansas manufacturing campus will add to EBITDA compression in 2026. The full‑year gross‑margin decline from 42.2% to 39.2% reflects the same accounting change and a modest shift in product mix toward lower‑margin decking items.
For 2026, Trex guided for revenue of $1.185 billion to $1.230 billion and adjusted EBITDA of $315 million to $340 million. The flat revenue outlook reflects a challenging repair‑and‑remodel environment, while the adjusted EBITDA range signals expected margin compression from the Arkansas facility depreciation and a continued focus on higher‑margin railing products. Management expressed confidence that the company can maintain profitability through cost control and product‑mix optimization.
Segment performance data showed double‑digit growth in railing sales, which helped offset softness in the repair‑and‑remodel market. Decking shipments in December were slightly better than forecast, and new product introductions contributed significantly to the 24% share of total sales. These dynamics underscore Trex’s ability to innovate and capture market share in its core product lines.
Bryan Fairbanks, President and CEO, announced his retirement effective April 28, 2026, and Adam Zambanini, Executive Vice President and Chief Operating Officer, will succeed him. Fairbanks noted that the company’s resilient performance in 2025 positions it well for 2026, while Zambanini emphasized disciplined innovation and a long‑term conversion from wood to composite decking.
Trex completed a $50 million share‑repurchase in the fourth quarter and authorized a $150 million buyback for the first half of 2026, underscoring management’s commitment to returning capital to shareholders while maintaining investment in growth initiatives.
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