Trex Launches Outdoor Lighting Product Line on Amazon – Analyst Blog

Trex Co. Inc. ( TREX ) has made its foray into the e-commerce marketplace with the launch of its high-performing Trex Outdoor Lighting collection on Amazon.com - the reputed retail website of Amazon.com Inc. ( AMZN ). This will complement Trex's traditional channel strategy, while making the brand and product line available to a wider consumer base.

Trex Outdoor Lighting will be the first product line to be sold by Trex directly on Amazon.com. The website currently sells Trex-branded products available through Trex licensees, including Trex Outdoor Furniture, Trex RainEscape and Trex Pergola,

Trex chose the Outdoor lighting category to be made available on the website because of its wider customer base than the decking contractors and consumers who shop for Trex products at lumber yards and retail centers. The line comprises a Deck Lighting collection recently upgraded with Cree LED components and "plug-and-play" designs for easy assembly, along with an all-new Landscape Lighting collection including well, path, multi-function and spotlight components. Each lighting option scores over traditional incandescent lighting by using 75% less energy and eliminating the concern of voltage drops. In addition, the lights offer durability, weather-proof and salt-air resistant characteristics.

With the increasing inclination of consumers toward online shopping, Trex's move in the area is well timed and a wise move. Amazon.com's wide reach and marketing skills will help Trex to maximize the potential of this product category and also to increase consumer awareness and credibility to the Trex brand. Trex will continue to strengthen its channels of distribution, which is already the strongest in the industry.

Trex's several distributors reported record sales of Trex's products, reflecting its expanded distribution footprint and dealer conversions. Moreover, the company has started realizing the benefits of three cost reduction initiatives that it has been implementing this year. In addition, pent-up demand and market share gains led to a 21% year-over-year increase in second-quarter 2014 earnings to 46 cents. Backed by strong sales activity in the quarter, Trex expects sales of around $92 million in the third quarter, reflecting a y-o-y increase of 27%.

Earlier this year, Trex marked its foray into a new industry that leverages two of its core strengths: recycling and extrusion. Trex is now manufacturing and selling polyethylene pellets made from recycled plastic to the plastic bag, film and sheet markets. These pellets are expected to partially displace virgin and off-spec resin, thereby lowering the cost for original equipment manufacturers.

Trex will benefit from the ongoing economic recovery. Additionally, the company's consistent focus on industry-leading distribution presence, best-in-class product platform, low-cost manufacturing and brand will drive growth. In addition to the outdoor lighting products, introduction of more products online will help boost Trex's revenues.

Winchester, VA-based Trex manufactures and distributes wood/plastic composite products and related accessories, primarily for residential and commercial decking as well as railing applications in the United States.

Currently, Trex carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Gibraltar Industries, Inc. ( ROCK ) and PGT, Inc. ( PGTI ). Both of these stocks carry a Zacks Rank #2 (Buy).

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Trex Launches Outdoor Lighting Product Line on Amazon - Analyst Blog