Medline Inc. recorded $243 million in net tariff refunds that it realized during its current fiscal year by the end of its Q2.

Those funds arrived against the backdrop of an overall net income decline of 58.3% year over year to $139 million for the quarter ended June 27. Despite that decrease, the medical supply company outlined its growth plans for the rest of its fiscal year. In addition, it reported an overall sales increase of 11.6% to $7.7 billion for the same period.

Jim Boyle, chief executive officer of Medline, said Q2 reflected “strong execution of our growth strategy” and “operational resilience.”

What drove Medline sales in Q2?

Medline credited existing customer growth and new customer signings from 2025 for its rise in Q2 sales. It noted in an earnings release that the latest total accounted for $89 million of accrued customer repayments. Those were associated with refunds from International Emergency Economic Powers Act (IEEPA) tariffs.

Those refunds were processed following the U.S. Supreme Court’s ruling in February 2026, which found that IEEPA tariffs were not appropriately authorized. Meanwhile, Medline attributed its drop in income to complications related to a June fire. That disaster damaged one of its distribution centers in California.

“We delivered robust top-line growth in the quarter, secured over 65% of our annual goal in total new customer signings during the first half of 2026, and moved swiftly to minimize disruption from the fire at our Tracy, California, distribution center, demonstrating an unwavering commitment to our customers,” Boyle said. “At the same time, we are effectively managing a dynamic external environment while investing in strategic initiatives to strengthen our market position and support long-term shareholder value creation.”

Impact from the Tracy fire on Medline

During Medline’s Q2 earnings call, Michael Drazin, the company’s chief financial officer, assessed that the “Tracy fire impact is transitory and will have some impact rolling in ’27.” Looking ahead, he told analysts that he expected to see improvements to the situation. Medline is setting up new California distribution centers based in Tracy and Stockton, adding new automation at those facilities.

“Obviously, the operational investments and some of the quality investments will be more permanent in nature and will roll into our base in 2027,” Drazin said.

At the same time, Medline lowered its guidance for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in its full-year 2026 outlook. That outlook fell to a range of $3.3 billion to $3.4 billion from $3.5 billion to $3.6 billion previously.

“Our outlook reflects several headwinds, including the Middle East conflict, the Tracy warehouse fire, growth-related operational investments, quality remediation efforts and softness in our retail business,” Boyle stated.

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