Thesis
Trex (TREX) posted a strong quarter, thanks to its Residential business unit. Residential sales climbed 24% yoy and are up 10% after the first nine months of 2019. The company had faced headwinds earlier in the year as production facility issues constricted supply of its decking products, which hurt sales.
The Commercial segment, a newer segment that comprises ~10% of revenue, saw sales contract sharply as orders were delayed to future quarters. Overall, company revenue was up 17% and the company believes Residential sales will remain strong into 2020.
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