As post-pandemic remodeling projects have slowed down given inflation, tough economic conditions, and sluggish housing sales, Trex revealed the impact its taken on decking.
The composite decking and outdoor living products manufacturer reported fourth 2022 consolidated net sales were $192 million, compared to $304 million in the prior-year quarter.
Residential net sales were $181 million compared to $288 million in the fourth quarter last year. Trex Commercial contributed $11 million to consolidated net sales.
The Winchester, Va.-based company sold its commercial business at the start of 2023 to Minneapolis, Minnesota-based Sightline Commerical Solutions, LLC for $8.25 million.
The divestiture of Trex Commercial resulted in a $15.4 million non-cash loss.
Full-year consolidated net sales were $1.1 billion compared to $1.2 billion in 2021. Trex Residential net sales were $1.1 billion for the full fiscal year.
Trex’s net income fell to $10 million in the fourth quarter compared to a net income of $25 million.
The company posted a full-year 2022 net income of $185 million, falling 11.3% compared to a net income of $209 million in fiscal year 2021.
The Bottom Line: Trex earnings fall by $15 million as sales see a heavy slide in the fourth quarter.
What the CEO said: Our fourth quarter operating results exceeded our expectations, driven by a strong sequential recovery in both gross margin and adjusted EBITDA margin amid channel inventory recalibration,” said Bryan Fairbanks, Trex president and CEO. ”Our underlying consumer demand remained steady, reflecting the strength of the Trex brand, our comprehensive product line designed for today’s living spaces and lifestyles, and the resilience of the outdoor living category.”
Company info:Click here to read the fourth quarter and full 2022 financial report from Trex.