Medline shares jump 18.5% after Q3 profit tops estimates

Medline (MDLN) topped profit estimates for the third quarter, reporting adjusted earnings of 44 cents per share against the 36-cent consensus estimate. Shares rose 18.5% in regular trading as of 3:59 p.m. ET, from a regular-session close of $34.09.

The company said on Nov. 4 that net sales rose 10.4% to $7.86 billion in the quarter ended Sept. 26, from $7.1 billion a year earlier. That was in line with the $7.88 billion consensus estimate.

Here's how the company did:

• Adjusted EPS: 44 cents vs. 36 cents expected
• Diluted EPS: 22 cents
• Net sales: $7.86 billion vs. $7.1 billion a year earlier, in line with $7.88 billion expected
• Net income: $318 million vs. $322 million a year earlier
• Adjusted EBITDA: $960 million vs. $859 million a year earlier

Adjusted EBITDA rose 11.8%, the company said, driven by higher net sales and net benefits from IEEPA tariff refunds. Net income fell 1.2%, as higher inventory costs tied to inflation, higher operating expenses and customer mix weighed on results.

The company recorded a net IEEPA tariff refund benefit of $81 million in the third quarter, according to its filing.

Revenue has risen in each of the last three quarters, from $6.64 billion to $7.68 billion, according to its SEC filings.

2026 guidance

The company raised its full-year 2026 organic sales growth outlook to 10.0% to 10.5%, from 9.0% to 10.0% previously. It reaffirmed its adjusted EBITDA outlook of $3.3 billion to $3.4 billion, the same range it gave on Aug. 5.

The adjusted EBITDA outlook does not include $324 million of net tariff refunds recorded through the first nine months of 2026.

CEO Jim Boyle said the quarter showed strength across the business. "Medline delivered another strong quarter, with double-digit net sales growth, reflecting continued momentum across our business," Boyle said.

Segment results

• Medline Brand: net sales of $3.64 billion vs. $3.41 billion a year earlier; adjusted EBITDA of $943 million vs. $821 million
• Supply Chain Solutions: net sales of $4.22 billion vs. $3.70 billion a year earlier; adjusted EBITDA of $184 million vs. $205 million

For the first nine months, net income fell 28.8% to $696 million. The company said that result reflected $316 million of net losses tied to a fire at its distribution center in Tracy, California.

Cash and capital returns

The company generated $2.2 billion of operating cash flow in the first nine months of 2026, leaving free cash flow of $1.8 billion after $348 million of capital expenditures.

In October, the board approved a share repurchase program of up to $1 billion of Class A common stock and units of Medline Holdings, LP. The company also prepaid $750 million in aggregate principal amount of its 2033 Refinancing Term Loan Facility.