Trex CEO Bryan Fairbanks told CNBC on Friday that sales for the company’s wood-alternative products have increased during the Covid-19 pandemic as consumers take on more home-improvement projects.
In addition to the increased demand for composite decks among homeowners, the manufacturer has boosted capacity and reduced its prices to make its products more affordable, Fairbanks said in a “Mad Money” appearance.
“People are beginning to really understand what the long-term cost of owning a wood deck is going to be,” he told CNBC’s Jim Cramer. “Another thing that we’re seeing significant traction on is people wanting to make the green decision.”
The home goods and remodeling markets have benefited during the pandemic from increasing interest in do-it-yourself and outdoor living projects as residents find new ways to stay busy amid lockdowns and travel restrictions over the past year.
In the final quarter of 2020 — which is usually a slower period for the company due to a drop-off in construction activity —Trex’s sales of residential products grew by 40% on a year-over-year basis.
Fairbanks noted that many customers find their way to Trex as they search for more sustainable materials to carry out their DIY projects. He added the company’s decks are made with 95% recycled material, as opposed to the environmental impact of pressure-treated lumber that contains high levels of chemicals.
While Trex competes with Azek in the alternative wood space, the company is focused on disrupting wood, which accounts for about 78% of the overall marketplace, he added. North America has an install base of 40 million wood decks, he said.
“There’s absolutely plenty of room in the market,” Fairbanks said when asked about competition in composite. “As we continue to grow as an organization, going after that largest segment of the marketplace, which is pressure-treated [wood], is very important for us and we’re excited about that opportunity.”
Trex’s total revenue grew by 18% in 2020 to $881 million, the company said in late February. That’s double the revenue growth rate Trex saw in 2019. The company is expecting another year of double-digit sales growth 2021, but did not give guidance for the full-year.
Shares of the $10 billion company rose 3.6% to $88.24 on Friday, breaking a three-day losing streak.