SouthernSun Exits Trex Company Position After $161M Q4 Sales Drop, Shares Down 31.6%
SouthernSun Smid Cap Strategy exited its Trex Company position in Q4 2025 after selling over half its shares, citing shifts in decking industry competition and choosing risk-reward alternatives. Trex logged Q4 net sales of $161 million, down 4% year-over-year, and its shares have fallen 31.6% over the past 52 weeks.
1. SouthernSun Strategy Sells Trex Position
In the fourth quarter of 2025, SouthernSun Smid Cap Strategy fully exited its position in Trex Company after previously selling over half of its shares into market strength. The decision reflected a reassessment of Trex’s risk-reward profile against more attractive investment opportunities elsewhere in the portfolio.
2. Shifting Industry Dynamics
The fund noted that Trex’s initial thesis—benefiting from a secular shift from wood to composite decking supported by brand, scale and distribution—has been challenged by increased competition and overcapacity in the sector. These dynamics prompted a reconsideration of the remaining stake’s upside potential.
3. Trex Financial Performance
Trex Company reported net sales of $161 million in Q4 2025, a 4% decline from $168 million in the same period of 2024. Operating pressures in the decking market contributed to the revenue shortfall despite ongoing consumer interest in composite products.
4. Stock Performance
Trex shares closed at $40.16 on March 3, 2026, marking an 8.3% loss over the previous month and a 31.6% drop over the past 52 weeks. The sustained share decline underscores growing investor caution amid evolving industry competition.