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Strong Q4 performance for Trex

BY HBSDealer Staff

Trex Company, the manufacturer of wood-alternative decking and railing, reported fourth quarter 2017 consolidated sales of $122 million, up 28% from consolidated sales of $95 million in the fourth quarter 2016.

Residential Products’ sales were up 15% to $109.6 million, with Trex Commercial Products sales contributing an additional $12.7 million, the Winchester, Va.-based company said.

Net income for the fourth quarter of 2017 was $18 million, up 45% from the net income of $13 million from last year’s fourth quarter.

“Our fourth quarter results represented a strong finish to another record year for Trex. Positive consumer confidence trends, strong demand for Trex Residential Products, and continued support from our channel partners, drove organic revenue growth of 15%,” said James Cline, Trex president and CEO

For full year 2017, consolidated sales were $565 million, an 18% increase from sales of $480 million in 2016. Residential Products sales grew 13% to $543 million, and Trex Commercial Products adding $22 million.

The company’s net income for 2017 increased 40% to $95.1 million from a net income of $67.8 million in 2016.

In July 2017, Trex acquired SC Company – a commercial railing manufacturer. The move was funded entirely through internally-generated cash and was rebranded as Trex’s wholly-owned subsidiary, Trex Commercial Products.

“Looking ahead, indications point to continued positive trends for the repair and remodeling markets, which together with favorable consumer confidence data, have been closely correlated with demand for Trex decking products,” Cline said.

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The $6 billion wooden skyscraper

BY HBSDealer Staff

Sumitomo Forestry Co., Ltd. plans to build the world’s tallest wooden high-rise building in Tokyo.

Called the W350 Plan, the 350-meter-tall building will consist of 70 stories and include offices, hotels, and residences, according to Sumitomo Forestry.

The Tokyo-based company said the goal of the structure is to create environmentally-friendly and timber-utilizing cities that become forests through increased use of wooden architecture for high-rise buildings.

Sumitomo Forestry said the total construction costs of the W350 Plan have been estimated to be almost double that of a conventional high-rise building constructed with current technology. The company estimates that the completed project will cost 600 billion Yen (US$5.57 billion).

The W350 concept plan has been prepared primarily at Tsukuba Research Institute, Sumitomo Forestry’s research and development facility, which is working on expanding possibilities for wooden buildings as a roadmap for future technology.

The planned structure is a hybrid wood and steel structure made from 90% wooden materials. It will use a braced tube structure in which steel frame vibration control braces are positioned inside a column and beam structure, made from a combination of wood and steel. The outermost side of the structure is designed with balconies that continue around all four sides of the building. The balcony gives the high-rise building a space in which people can enjoy fresh outside air, rich natural elements and sunshine filtering through foliage,

If you plan on visiting the structure after its completion, there is a catch. The building will not be completed until 2041 when Sumitomo celebrates its 350th year in business.

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A record Q4. Here’s how Depot did it.

BY HBSDealer Staff

Sales exceeded expectations at the Home Depot in the fourth quarter of 2017. Sales increased to $23.9 billion, as domestic comps hit positive 7.2%.

During the company’s earnings call, Ted Decker, executive VP of merchandising, described sales as strong throughout the store, with a little extra strength from the pro customer and online sales. The latter continued their pace of double-digit growth, he said. A breakdown of performance department by department is here:

• Double-digit comps: lumber, electrical and tools enjoyed double-digit comps in the quarter.

• Higher than average comps: Appliances, plumbing, building materials.

• Lower than average, but positive: Décor, flooring, millwork, paint, indoor garden, hardware, outdoor garden, and kitchen and bath

Only one category was tagged with a negative comp – lighting. According to Decker, the reason is primarily due to LED price deflation.

According to Decker, sales to pro customers grew double-digits in the fourth quarter. “Pro-heavy categories such as lumber, pressure treated decking, insulation, and gypsum all had double-digit growth during the quarter with solid unit productivity,” he said.

Decker pointed to localized assortments in the hardscapes category as example of “balancing the art and science of retail,” he said. “We are leveraging the power of our clustering and space optimization tools to assign assortments and facings at a local store level.” So far, it seems to be working, he added.

Looking ahead, Decker shared with analysts a pair of specific products for which the retailer has high hopes. These were the Klein Tools new 9-inch Journeyman Diagonal-Cutting Pliers and the Hampton Bay patio furniture collection with CushionGuard technology, which he says guarantees water repellency, as well as protection from fading and stains.

Also from the company's fourth quarter results:

• Sales per square foot were $394.87, up 7.8%

• Big ticket sales ($900 plus) were up 9.8%

• Transactions for tickets under $50 increased 0.8%

• Average ticket was $64, up from $60.55.

• Comp average ticket increased 5.5%

• Comp transactions increased 1.9%

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