Medline Inc. (MDLN) Earnings & Analysis

Latest quarter

Medline reported Q2 FY2026 revenue of $7.7 billion, up 11.6% from $6.9 billion a year earlier and above the consensus of $7.5 billion. The company said organic growth came substantially from higher volumes, while pricing had an immaterial impact.

In its filing, Medline attributed growth in U.S. sales primarily to higher Prime Vendor volumes, partly offset by customer repayments associated with tariff refunds. Both Medline Brand and Supply Chain Solutions increased sales; the latter benefited from new Prime Vendor relationships and growth with existing customers.

Medline reported gross margin of 28.8%, compared with 27.7% a year earlier. The company attributed the increase primarily to net tariff refunds, partly offset by higher import costs. Operating margin fell to 5.14% from 9.32%; the filing said other operating expenses increased primarily because of a fire at a distribution center.

Medline reported diluted earnings per share of $0.07 and free cash flow of $604.0 million, compared with $87.0 million in free cash flow a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

In its filing, Medline said it was monitoring tariff developments and considering measures including changes to production, sourcing and pricing. The company also said it was working with the FDA to resolve warning-letter observations and expected quality remediation and investments to increase costs in the second half of fiscal 2026.

Guidance

Medline raised its FY2026 organic sales growth outlook to 9.00% to 10.0%, citing demand from existing and new customers. It lowered its adjusted EBITDA outlook to $3.3 billion to $3.4 billion, citing inflationary pressure from the Middle East conflict, operational investments, quality remediation and retail channel softness.