Consumer Squeeze Hits Home Renovation Spending As Leading Deck-Maker Shares Collapse

Trex Company's stock plummeted after its Q4 net sales forecast fell below expectations, signaling potential challenges. The company's adjusted EPS and EBITDA also missed estimates, raising concerns about its financial performance. Analysts attribute the weak outlook to soft consumer spending and increased competition in the home-improvement sector. Trex is responding by matching competitors' marketing spending, impacting profitability. William Blair downgraded Trex, citing a business model reset due to industry dynamics. Truist maintains a Buy rating driven by long-term secular growth, while acknowledging potential acquisition interest. Barclays analysts see near-term fundamental cracks with potential for further market share loss. Trex shares dropped to early-2020 levels following the disappointing forecast, reflecting investor concerns. The premarket trading saw a significant drop, the largest since the Dot-Com bust. Trex's performance serves as an indicator for discretionary spending in the outdoor living and remodeling segments.