Worthington Steel (WS) Q4 2026 earnings summary

Executive summary

• Completed the largest acquisition in company history, acquiring a 62% stake in Klöckner & Co., expanding scale, capabilities, and end-market diversification.

• Net sales for Q4 FY26 rose 12% year-over-year to $929.2 million, driven by higher direct volumes and the addition of Sitem Group.

• Q4 FY26 saw an operating loss of $57.6 million, mainly due to $94.5 million in non-cash impairments in the Electrical Steel unit and acquisition-related expenses.

• Recognized for supplier excellence and community engagement, and declared a quarterly dividend of $0.16 per share.

• Strategic focus on growth markets such as automotive electrification, infrastructure, and energy transition.

Financial highlights

• FY2026 net sales of $3.44B, up from $3.09B in FY2025; Q4 FY26 net sales: $929.2M (+12% YoY).

• Adjusted EBITDA for FY2026 was $246M (margin 7.2%); Q4 FY26 adjusted EBITDA: $75.2M (margin 8.1%).

• Q4 FY26 operating loss: $57.6M vs. operating income of $66.4M in Q4 FY25.

• Free cash flow for FY2026 totaled $80M; Q4 FY26 free cash flow: $7.8M.

• Net loss attributable to controlling interest was $48.7 million ($0.98 per share), compared to earnings of $55.7 million ($1.10 per share) in the prior year quarter, due to non-cash impairment and transaction costs.

Outlook and guidance

• Targeting adjusted EBITDA margin expansion to 10%+ through acquisitions, product mix, and operational improvements.

• Expecting $10–$15 million in pre-tax inventory holding gains in Q1 fiscal 2027.

• Fiscal 2027 capital expenditures for legacy business expected to be ~$60 million; annual capex targeted at $100–150M.

• Focused on Klöckner integration, synergy capture ($150 million EBITDA target), working capital discipline, and debt reduction.

• Expecting to de-lever to less than 2.5x net leverage within 24 months post-Klöckner acquisition.