Worthington Steel (NYSE: WS) jumps 212% in sales and posts a loss

Posted by on Oct 7th, 2026

What happened

Worthington Steel, Inc. (NYSE: WS) reported first-quarter fiscal 2027 results that included Kloeckner after its majority acquisition. Net sales were $2.73 billion, up 212% from $872.9 million a year earlier. Kloeckner contributed $1.77 billion to that total.

Direct net sales increased $81.7 million. Direct tons sold increased 3%, and direct selling prices increased 6%. Toll net sales fell $0.7 million. Operating income was $56.0 million, compared with $48.3 million, and adjusted EBITDA was $111.0 million versus $78.8 million.

Net loss attributable to controlling interest was $7.0 million after $36.8 million of net earnings a year earlier. Worthington Steel also declared a quarterly dividend of $0.16 per common share, payable December 28, 2026, to shareholders of record at the close of business on December 14, 2026.

Key numbers

Metric Latest Change Source
Net sales $2.73 billion from $872.9 million, + $1.85 billion SEC 8-K Exhibit 99.1
Kloeckner contribution to net sales $1.77 billion SEC 8-K Exhibit 99.1
Operating income $56.0 million from $48.3 million, +7.7 million SEC 8-K Exhibit 99.1
Net earnings (loss) attributable to controlling interest -$7.0 million from $36.8 million, -$43.8 million SEC 8-K Exhibit 99.1
Adjusted diluted EPS – continuing operations $0.57 from $0.77, -$0.20 SEC 8-K Exhibit 99.1
Net cash used in operating activities -$6.0 million from -$6.3 million, +0.3 million SEC 8-K Exhibit 99.1

Read more: Worthington Steel (WS) stock analysis and investment case

Why it matters

OptimistFi's case is that Worthington Steel works if its value-added metals processing remains a customer-critical outsourced capability and regains normalized spread margins after the FY2026 profit shock. This quarter keeps that case open, but Kloeckner drove about 65.0% of net sales, a ratio OptimistFi calculated from the figures in the release.

Excluding Kloeckner, net sales still increased $81.0 million, or 9%, driven mainly by higher direct volumes and higher average direct selling prices. Excluding Kloeckner, operating income fell $16.5 million because selling, general and administrative expense rose $17.6 million and professional fees rose $18.6 million.

Cash and cash equivalents were $248.2 million at August 31, 2026, while total debt was $2.2 billion. Net cash used in operating activities was $6.0 million, and investment in property, plant and equipment was $63.0 million. The quarter also included negative free cash flow of $69.0 million, compared with negative free cash flow of $35.7 million a year earlier.

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What's next

The company will review fiscal 2027 first-quarter results on October 7, 2026, at 8:30 a.m. Eastern Time. The release also says the DPLTA with Kloeckner cannot become effective before January 1, 2027.

A stronger second-quarter update would show legacy operating income and cash flow improving. Weaker results would leave the acquisition burden in place. The dividend schedule gives investors a dated cash return to track against operating performance.

More from OptimistFi

Sources

Read the full OptimistFi thesis on Worthington Steel, Inc.: https://optimistfi.com/stocks/WS

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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.