Hagens Berman Investigates Trex Company (TREX) Over Potential Securities Violations
SAN FRANCISCO, Jan. 20, 2026 (GLOBE NEWSWIRE) — Hagens Berman, a national shareholder rights firm, has launched an investigation into Trex Company, Inc. (NYSE: TREX). The inquiry centers around possible violations of U.S. securities laws, particularly concerning the company’s undisclosed sales practices that may have led to inflated sales figures. This situation arose as Trex assured investors that its new “level-loading” production strategy would stabilize inventory levels.
Key Details of the TREX Investigation
- Ticker Symbol: TREX (NYSE)
- Stock Impact: 31% drop on November 5, 2025, resulting in a market cap loss of approximately $1.5 billion
- Core Focus: Investigation into whether TREX concealed excess inventory at distributors
- Revised Sales Growth Metric: 2025 growth estimate reduced from +7% to 0%
Investors affected by significant losses from TREX securities are encouraged to contact Hagens Berman for assistance, along with any individuals who possess relevant knowledge for the investigation.
Background and Details of the Investigation
The investigation by Hagens Berman highlights a possible disconnect that emerged in the latter half of 2025. In August, Trex management announced that their revised inventory strategy aimed to minimize the volatility linked to channel stocking and de-stocking. They claimed that by implementing “level-loading” production, the company could better manage inventory cycles and optimize operational efficiency. Additionally, Trex projected a sales growth of 5% to 7% for the fiscal year 2025.
However, this optimistic outlook was shattered on November 4, 2025, when Trex reported disappointing Q3 financial results. Net sales of $285 million were 5% below the midpoint of the company's guidance and represented a staggering sequential decline of approximately 26%. Trex further announced a bleak fourth-quarter outlook, noting that pro channel partners would be reducing their inventories for the remainder of the year. This prompted an immediate revision of the company's sales growth forecast to around 0% for 2025.
The revelations caused TREX stock to plummet by 31% intraday on November 5, 2025. Reed Kathrein, a partner at Hagens Berman, remarked, “We’re focused on whether Trex was aware that demand was softening but continued to push product into the channel to meet short-term targets.”
Frequently Asked Questions (FAQs)
What is “Level-Loading” and why is it significant?
The “level-loading” production strategy claimed by Trex is under scrutiny as it promised operational efficiencies and consistent results. The investigation probes whether this tactic was potentially employed to mask a downturn in end-user demand.
What led to the decline in TREX stock value?
The stock crumbled on November 4, 2025, when Trex posted Q3 sales that fell 5% short of its own mid-point guidance while slashing its annual growth expectations to a flat rate. These factors, compounded by revelations of channel de-stocking, resulted in a significant 31% drop in stock value.
What should whistleblowers know?
Individuals with non-public information related to TREX may consider taking part in the investigation or utilizing the SEC Whistleblower program, which allows whistleblowers to earn up to 30% of any successful recovery made by the SEC. For further details, interested parties can contact Reed Kathrein at 844-916-0895 or email TREX@hbsslaw.com.
About Hagens Berman
Hagens Berman is a leading global complex litigation firm focused on protecting shareholder rights and ensuring corporate accountability. The firm represents investors, workers, consumers, and whistleblowers, achieving over $2.9 billion in settlements and recoveries in corporate accountability cases. For more information about Hagens Berman and its numerous successes, please visit hbsslaw.com or follow the firm for updates on Twitter at @ClassActionLaw.