Trex (NYSE:TREX) has a story to tell, and it's hitting the road as a storyteller.
The top dog in wood-alternative decking will be appearing in four different investing conferences between September 10-19, presenting its case before attendees and speaking one-on-one with institutional investors.
It's just as well because Trex has a lot of explaining to do.
The company stumbled last month after posting inexplicably weak quarterly results.
It's not just that revenue rose by a mere 5% during the period at a time when the housing market is booming and folks should be diving into home-improvement projects. The rub here is that Trex was targeting 10% top-line growth just three months earlier. Why did the market deteriorate so rapidly during the latter half of the quarter? Why is Trex only calling for 2% growth during the current quarter?
Investors were probably spoiled after seeing hardwood flooring retailer Lumber Liquidators (NYSE:LL) soar two weeks earlier after posting strong quarterly results and providing upbeat guidance. Wedged between the reports of Lumber Liquidators and Trex, Tile Shop (NASDAQ:TTS) reported a 26% uptick in sales and increased its expansion efforts for the balance of the year.
Why are Lumber Liquidators and Tile Shop doing so well when it seems as if Trex is struggling to keep pace with inflation? Aren't all three companies flooring specialists?
If the distinction here is that homebuyers update their interior flooring first, fine. Trex's moment to shine will come eventually. However, if there's a reason for its once-heady growth slowing, it needs to do a better job of explaining the shortfall. Four appearances at investing conferences will help start the healing for a stock that has surrendered more than a quarter of its value since peaking less than three months ago.
It's time to build something that will last and weather the storm, just like Trex products.