Medline Q3 2026: EPS beats by 27%, full-year growth outlook raised

Medline posted adjusted diluted EPS of $0.44 for Q3 2026, clearing the consensus estimate of $0.35 by 27%. Revenue came in at $7.86 billion, topping estimates by 1.75% and growing 10.4% from the same quarter a year earlier. The quarter extended a pattern of consistent outperformance visible in the company's earnings history, following beats in Q4 2025, Q1 2026, and Q2 2026.

The top-line momentum was driven by organic sales growth of 10.5%, which management attributed to deepening relationships with existing customers and the ramp-up of new customer signings secured in 2025. CEO Jim Boyle pointed to continued commercial execution and progress toward the company's annual total new customer signings goal. Supply Chain Solutions, the larger of the two reporting segments with $4.22 billion in revenue, grew 13.9% year over year, while the Medline Brand segment posted $3.64 billion, up 6.6%.

Profitability was a more complicated story. Gross margin narrowed to 24.5% from 26.4% a year earlier, pressured by LIFO-related inventory adjustments of $122 million and customer mix headwinds. Operating income fell 12.9% year over year, and GAAP diluted EPS of $0.22 stood well below the adjusted figure once intangible amortization, stock-based compensation, and other non-core charges were added back. One notable drag was costs related to the recall and discontinuation of Medline Brand bed products, with associated charges that could reach $220 million.

An $81 million net benefit from IEEPA tariff refunds provided a meaningful offset during the quarter, following a U.S. Supreme Court ruling earlier in 2026 that found those tariffs unauthorized. That figure comprised $70 million in direct tariff refunds plus an $11 million net sales increase tied to customer repayment adjustments. Adjusted EBITDA climbed 11.8% to $960 million for the quarter, and the company noted that its full-year Adjusted EBITDA guidance of $3.3 billion to $3.4 billion excludes IEEPA tariff refund benefits.

With the strong quarter in hand, Medline raised its full-year 2026 organic sales growth outlook to 10.0%-10.5%, up from the prior range of 9.0%-10.0%. The company also announced a board-approved share repurchase program authorizing up to $1 billion in buybacks of Class A common stock and units of Medline Holdings, LP. On the balance sheet, cash and equivalents stood at $2.32 billion, more than double the level a year earlier, and the company prepaid $750 million on its 2033 Refinancing Term Loan Facility, bringing net leverage to 2.5x.