TRG | The Bottom Line – 6/27

Domestic manufacturing and supply chain management are marque field that have been thrust into the spotlight in the wake of tariffs. One company in TRG’s coverage universe WOR-th talking about is Worthington Enterprises (WOR). The company spun out of Worthington Steel in 2023 then had a variety of headwinds across the first year (part macro, part company specific). The past 2 quarters have started to showcase the true potential of the business in terms of margin growth, part of which is underpinned by being a domestic manufacturer (often the only domestic manufacturer). This dynamic is valuable to WOR and being valued by customers, but the benefit is hard to quantify. WOR is often the only domestic manufacturer of certain products and is seeing more conversations with customers who want to fortify their relationship with the domestic manufacturer. Customers looking to reduce their foreign supply risk or have shorter lead times when products are needed in the case of natural disasters are increasing their relationship with WOR. We expect this to continue to benefit WOR in share gains, incremental volume gains, and eventual margin contribution as domestic manufacturing is arguably the most valuable now more than ever.