Trex Company, Inc. Reports Fourth Quarter and Full Year 2025 Results
Trex Company, Inc. (NYSE: TREX), the world’s largest manufacturer of wood-alternative decking and railing products, has announced its financial results for the fourth quarter and full year ended 2025. The company delivered resilient performance despite ongoing challenges in the repair and remodeling (R&R) market, supported by strong product innovation, expanded distribution, and strategic investments in growth initiatives.
Fourth Quarter 2025 Financial Performance
For the fourth quarter of 2025, Trex reported net sales of $161 million, slightly below the $168 million recorded during the same period in the prior year. Gross profit totaled $49 million, resulting in a gross margin of 30.2%. This compares to gross profit of $71 million and a gross margin of 42.3% in the fourth quarter of 2024.
The quarter’s gross profit included a $6.0 million increase in the company’s warranty reserve estimate following an actuarial review. On an adjusted basis—excluding start-up costs related to the Arkansas plastic processing facility and railing conversion expenses totaling approximately $1.0 million—adjusted gross profit reached $50 million.
Selling, general, and administrative (SG&A) expenses were $45 million, or 28.0% of net sales, compared to $39 million, or 23.4% of net sales, in the prior-year period. The increase reflects higher personnel-related costs and investments in digital transformation initiatives. Excluding digital transformation and start-up costs of $1.0 million, adjusted SG&A totaled $44 million, or 27.4% of net sales.
Net income for the quarter was $2 million, or $0.02 per diluted share, compared to $22 million, or $0.20 per diluted share, in the fourth quarter of 2024. EBITDA for the quarter was $20 million, with an EBITDA margin of 12.7%, versus $45 million and a 26.9% margin in the prior-year quarter. Adjusted net income for Q4 2025 was $4 million, with adjusted diluted EPS of $0.04, excluding one-time charges.
Full Year 2025 Financial Results
For the full year, Trex generated net sales of $1.2 billion, representing a 2.0% increase over 2024. Gross profit reached $460 million, with a gross margin of 39.2%, compared to $502 million and a 43.6% gross margin in the previous year. Adjusted gross profit, excluding $6.4 million in railing conversion costs and $2.7 million in start-up expenses, totaled $469 million.
SG&A expenses for the year were $202 million, or 17.2% of net sales, compared to $180 million, or 15.6% of net sales, in 2024. Excluding $3.5 million in digital transformation expenses and $2.5 million in start-up costs, adjusted SG&A was $196 million, or 16.7% of net sales.
Full year net income was $190 million, or $1.78 per diluted share, compared to $238 million, or $2.20 per diluted share, in 2024. EBITDA for the year totaled $321 million, with an EBITDA margin of 27.3%, compared to $377 million and a 32.7% margin in the prior year. Adjusted net income reached $202 million, with adjusted diluted EPS of $1.88. Adjusted EBITDA for 2025 was $336 million.
CEO Commentary on Performance and Strategy
Bryan Fairbanks, President and CEO, stated that fourth quarter sales exceeded expectations, driven primarily by stronger-than-anticipated railing sales during the latter part of Q4. December decking shipments also outperformed internal forecasts.
For the full year, Trex estimates sell-through growth of approximately 4%, significantly outperforming the broader R&R market. Fairbanks emphasized that this performance reflects the strength of the Trex brand, its established presence across professional contractor channels and home centers, and the successful launch of new products.
New products accounted for 24% of the total 2025 sales. Railing sales experienced significant double-digit growth, underscoring effective alignment between product development initiatives and consumer demand. The company also noted positive impacts from refreshed branding and marketing programs, which drove increases in website traffic, contractor lead generation, and sample program engagement.
Strategic Investments and Operational Developments
Profitability during both the fourth quarter and full year was affected by several one-time charges tied to growth initiatives. These included expanding distributor adoption of the full railing portfolio, start-up and initial production costs at the Arkansas plastic processing plant, and investments in digital transformation projects aimed at enhancing real-time engagement with channel partners.
Management expects these investments to deliver returns beginning in 2026 and beyond. Additionally, continuous improvement programs and level-loading production strategies generated measurable operational efficiencies throughout 2025.
Recent Product Launches and Market Expansion
Trex introduced a limited release of Trex® Refuge™ Decking, a PVC decking solution designed to meet elevated fire-safety standards in select regions, particularly in western markets prone to wildfires. This product reflects Trex’s strategy of delivering performance-engineered, code-compliant solutions tailored to specific environmental challenges.
The company also expanded its Enhance® decking line with two new colors incorporating SunComfortable™ heat-mitigating technology at an accessible price point. This initiative aims to convert traditional wood buyers by combining aesthetic appeal with durability and low-maintenance benefits.
Trex strengthened its distribution footprint through expanded partnerships. The company broadened its relationship with Specialty Building Products to achieve statewide coverage in Michigan, reinforcing its Midwest presence. Additionally, Trex expanded collaboration with Weekes Forest Products to enhance distribution in Minnesota, Wisconsin, Iowa, and North Dakota, improving product availability for contractors and dealers.
2026 Outlook and Growth Expectations
Looking ahead, management expressed confidence in entering 2026 with positive momentum. The company anticipates outperforming a flat R&R market through continued innovation, expanded home center shelf space, and sustained marketing initiatives.
Trex expects 2026 revenue to range between $1.185 billion and $1.230 billion. Adjusted EBITDA guidance is projected between $315 million and $340 million. Management highlighted expected continued double-digit growth in railing sales and progress toward the goal of doubling market share in railing by the end of 2028.
Further product launches are planned over the next twelve months, including additional innovations building on the introduction of Trex® Refuge™ Decking. Incentive programs for dealers and contractors will remain a priority, with a significant portion of 2026 sales and marketing investments dedicated to expanding and supporting the contractor base.
Shareholder Returns and Capital Allocation
Demonstrating confidence in its long-term outlook, Trex repurchased 1.5 million shares during the fourth quarter of 2025 for approximately $50 million at an average price of $32.75 per share.
The Board of Directors authorized an additional $150 million share repurchase program to be executed in the first half of 2026. Management indicated that opportunistic repurchases will continue throughout the year, supported by strong free cash flow generation and reduced capital expenditures.
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