Trex (NYSE:TREX) Company Inc shares rose 4% to $57.30 in early Tuesday trading after the provider of eco-friendly decking and railing reported third quarter 2023 net sales that surged 61% to $304 million, surpassing the consensus analyst forecast by nearly $14 million.
Its adjusted earnings per share (EPS) of $0.57, meanwhile, also exceeded expectations by $0.07.
As well, the company's gross margin improved to 43.1%, driven by increased production volumes and cost efficiencies.
"Higher sales volume, increased utilization rates and the benefits from our investments in production efficiencies drove a significant improvement in gross margin in the third quarter and again demonstrated our ability to achieve strong performance on less-than-full capacity," Trex (NYSE:TREX) CEO Bryan Fairbanks said in a statement.
"Our return to normalized brand spending is showing returns as the market continues to demonstrate mid-single digit sell through growth, despite economic uncertainties," he added.
Looking ahead, Trex raised its full year revenue guidance to $1.09 billion, from $1.04 billion to $1.06 billion previously, on higher consumer demand for its expanded portfolio of products, while also increasing its full year adjusted EBITDA margin outlook slightly to range of 29% to 29.5%.
Shares of Trex have gained 29% year to date.
Contact Sean at sean@proactiveinvestors.com