Trex Company, Inc. (NYSE:TREX) shares were trading 8% lower Tuesday afternoon following the company’s Q4 results, which came in better than expected, however, inflationary pressures continued to weigh on the gross margins of the business. The company expects pressures to continue into Q1 before abating through the year. Looking ahead the company expects to continue to see robust demand and is guiding to double-digit net sales growth following 36% growth in 2021.

Q4 EPS came in at $0.55, beating the consensus estimate of $0.53. Revenue was $304 million (up 33% year-over-year), compared to the consensus estimate of $302.51 million. Revenue growth was driven by broad-based volume growth in both pro and retail channels, as well as a favorable impact from pricing actions in Trex Residential. Trex Residential grew net sales by 35% year-over-year in Q4 and Commercial grew 6% year-over-year.