Medline Raises Sales Outlook, Cuts Ebitda Target

The Tip Desk · August 5, 2026 · 3 min read

Second-quarter net sales reached $7.7 billion as the company lifted 2026 organic-sales guidance to 9.0% to 10.0% and cut Adjusted EBITDA to $3.3 billion to $3.4 billion.

Medline Inc. (MDLN), the largest provider of medical-surgical products and supply chain solutions, reported second-quarter net sales of $7.7 billion, an 11.6% increase from a year earlier, and raised its full-year 2026 organic-sales outlook to 9.0% to 10.0% from 8.5% to 9.5%.

The company said the higher sales outlook reflected strong existing and new customer demand. Organic sales rose 11.5%, including $89 million of accrued customer repayments tied to IEEPA tariff refunds.

Adjusted EBITDA guidance moved the other way. Medline cut its 2026 Adjusted EBITDA outlook to $3.3 billion to $3.4 billion from $3.5 billion to $3.6 billion, citing higher-than-expected inflation from the Middle East conflict, increased operational investments, quality remediation and retail-channel softness. The organic-sales outlook includes IEEPA tariff customer repayments; the Adjusted EBITDA outlook does not include the benefit of IEEPA tariff refunds.

Net income fell 58.3% to $139 million from $333 million a year earlier. The decline was driven primarily by $336 million of losses related to a fire at its Tracy, California, distribution center, before expected insurance recoveries, higher operating expenses and higher cost of goods sold, including tariffs, partially offset by higher net sales and $243 million of net IEEPA tariff refund benefits. Diluted earnings were $0.07 a share. Adjusted diluted EPS was $0.50.

Adjusted EBITDA increased 13.4% to $1,060 million from $935 million a year earlier, reversing a 10.6% year-over-year decline in the first quarter. The increase was driven primarily by higher net sales and net IEEPA tariff refund benefits, partially offset by higher operating expenses and higher cost of goods sold, including tariffs. Adjusted EBITDA margin was 13.8%.

Gross profit rose 16.3% to $2,215 million and gross margin expanded to 28.8% from 27.7%. Operating income fell 38.5% to $395 million and operating margin compressed to 5.1% from 9.3%. Other operating expenses were $348 million, compared with $14 million a year earlier. Selling, general and administrative expenses were $1,295 million.

Medline Brand net sales rose 6.6% to $3,540 million. Segment Adjusted EBITDA rose 19.9% to $1,067 million, and Adjusted EBITDA margin widened to 30.1% from 26.8%. The IEEPA refund and repayment items were recorded entirely in Medline Brand. Supply Chain Solutions net sales rose 16.3% to $4,145 million. Segment Adjusted EBITDA was $204 million and Adjusted EBITDA margin slipped to 4.9% from 5.6%. Corporate and other Adjusted EBITDA was a $211 million loss.

Chief executive Jim Boyle said second-quarter results reflected execution of the growth strategy and the operational resilience of the team. The company delivered robust top-line growth, secured over 65% of its annual goal in total new customer signings during the first half of 2026, and moved to minimize disruption from the Tracy fire.

For the first six months ended June 27, 2026, net sales were $15.0 billion, up 11.1%, with organic sales up 10.8%. Net income for the six months was $378 million, down 42.3%. Adjusted EBITDA for the six months was $1.84 billion, up 1.9%. Diluted earnings were $0.23 a share and adjusted diluted EPS was $0.83.

Net cash provided by operating activities for the first six months was $1.1 billion. Free cash flow was $920 million, after $207 million of capital expenditures, primarily related to enhancements and automation in distribution centers and investments in kitting manufacturing facilities.

Cash and cash equivalents were $2,327 million as of June 27, 2026, with short-term investments of $350 million. Long-term borrowings, less the current portion, were $12,548 million. Net leverage was 2.9 times trailing-twelve-month Adjusted EBITDA of $3,500 million.

The company will host a conference call on August 5, 2026, to discuss the results.