TRG | The Bottom Line – 7/12

While R&R is in a multi-year recession (3 years of declines off the 2020 boom) and big-ticket overall is doing worse, some big-ticket spending is doing far better. The demand for outdoor products is outperforming meaningfully – products like composite decking and siding. You can see this in the spectrum of 2024 sales outlooks by public companies. If these segments of outdoor can outperform in a stagnant environment, they should further outperform in a growing R&R environment. We believe these projects are a reflection of 1) homeowners staying in place and improving their place, 2) high home equity values to cushion the investment, 3) high return on investment, and 4) lower cost vs. kitchen and bath remodels. TRG-covered names like Trex and AZEK are clear beneficiaries, as is Louisiana Pacific (LPX). This note overviews outdoor trends vs. indoor trends and ROI for these projects.