10-Q · August 4, 2026
Trex delivered Q2 2026 revenue of $418.019 million, up 7.8% year over year and 21.9% sequentially, but profitability weakened as gross margin fell to 37.9% and GAAP EPS declined to $0.60 from $0.71 a year earlier.…
Earnings analysis · 10-Q
TREX earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Trex delivered strong third-quarter top-line growth, with revenue up 26.0% to $359.5 million and diluted EPS up 8.3% to $0.52. However, gross margin declined 450 basis points to 36.0% and nine-month net income fell…
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Trex delivered strong third-quarter top-line growth, with revenue up 26.0% to $359.5 million and diluted EPS up 8.3% to $0.52. However, gross margin declined 450 basis points to 36.0% and nine-month net income fell 6.6%, reflecting transportation costs, Arkansas start-up expenses, higher depreciation, unfavorable mix, and increased operating investment. Liquidity remains supported by $248.4 million of year-to-date operating cash flow and $526.9 million of revolver availability, but cash was only $3.3 million and borrowings were $170.0 million.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.52
- Gross margin
- 36.0%
- Segment
- Single reportable segment; segment revenue breakdown was not disclosed
What stood out
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Strong volume-driven revenue growth
Third-quarter net sales increased 26.0% year over year to $359.5 million from $285.3 million, driven substantially by higher volume, partially offset by product mix.
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Profit dollars and EBITDA increased
Third-quarter gross profit rose 12.2% to $129.5 million, while EBITDA increased 9.6% to $94.7 million from $86.4 million.
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Quarterly EPS up, year-to-date EPS down
Diluted EPS increased to $0.52 from $0.48 year over year, an 8.3% improvement. Nine-month EPS was $1.70 versus $1.75, down 2.9%.
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Strong operating cash generation
The company generated $248.4 million of operating cash flow in the first nine months and invested $75.3 million in capital expenditures, including $33.8 million for the Arkansas facility.
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Expanded liquidity capacity
Trex expanded its revolving credit facility to a $700.0 million loan limit through March 26, 2031; availability was $526.9 million at September 30, 2026.
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Significant share repurchases
The company repurchased 5.2 million shares during the first nine months and had 12.2 million shares remaining available under the repurchase program at September 30, 2026.
What to watch
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Material gross-margin compression
Third-quarter gross margin fell to 36.0% from 40.5% year over year, while cost of sales increased 35.4% to $230.0 million. Management cited higher depreciation, transportation costs associated with increased diesel prices, and increased labor as the Arkansas facility began production.
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Earnings growth lagging sales growth
Nine-month net income declined 6.6% to $175.8 million from $188.1 million despite 10.6% revenue growth. Nine-month EBITDA increased only 0.5% to $302.1 million, indicating operating deleverage.
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Low cash balance and higher borrowings
At September 30, 2026, cash and equivalents were only $3.3 million, while borrowings under the revolving credit facility were $170.0 million. The company also reported $173.7 million of financing cash outflows for the first nine months, primarily related to share repurchases.
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Arkansas ramp execution risk
The Arkansas manufacturing facility contributed to increased depreciation and labor costs in the quarter; the company spent $33.8 million on the facility during the first nine months and reported $0.9 million of Arkansas start-up costs in year-to-date SG&A.
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Tariff and input-cost exposure
Less than 5% of cost of sales is projected to be impacted by tariffs, primarily on aluminum and steel used in railing and fastening products; the company expects to mitigate some impact with pre-tariff inventory and supplier negotiations.
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Asset write-downs and rising investment
The company reported $5.2 million of other expenses in the first nine months, primarily from writing down Virginia manufacturing-facility assets to estimated fair value, while nine-month SG&A rose 14.4% to $179.5 million.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. It states that 2026 capital expenditure guidance is approximately $100 million and that future capital requirements may differ materially depending on product demand and new market developments.
Earlier filings 2
10-Q · May 7, 2026
Trex Company reported Q1 2026 results with revenue of $343 million and diluted EPS of $0.58, both exceeding analyst expectations. While net sales increased slightly year-over-year by 1%, gross profit also saw a minor…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.