Highest FDA recall issued for certain convenience kits by Medline

Medline reported Q2 sales up 11.6% to $7.685B and net income down 58.3% to $139M, citing $336M fire-related losses tied to its Tracy, California distribution center. For 1H 2026, sales rose 11.1% to $15.037B. Medline said it signed over $650M in new customer business and is adding distribution centers, automation, and workers, including California capacity expansion to about 5M sq ft by mid-2027.

Medline (MDLN) Q2 2026 call said adjusted EBITDA rose 13% YoY to $1.1B, with higher costs partly offset by a $243M IEEPA tariff refund benefit. Q2 net sales grew 12% to $7.7B. Company raised fiscal 2026 organic sales outlook, but moderated adjusted EBITDA outlook citing Middle East conflict, Tracy warehouse fire, investments, quality remediation, and retail softness.

Medline said regulatory guidance followed its corrective actions for surgical convenience kits whose components were affected by a Becton Dickinson recall. The alert cites BD lot 4032183 ChloraPrep Clear 1 mL and lot 4073005 FREPP Clear 1.5 mL applicators, with compromised sterile seals and possible Aspergillus contamination. Medline reported no severe injuries or deaths as of Aug 3. MDLN shares were $35.71, up 0.61%.

The FDA issued a warning letter to Medline (NASDAQ:MDLN) dated May 28, 2026 citing significant Current Good Manufacturing Practice violations, including failures to investigate discrepancies and microbial contamination incidents and inadequate cleaning practices, Reuters reported. Medline shares fell over 7% after the news and over 12% on Aug. 5 after Q2 results and lowered full-year adjusted EBITDA guidance.

Medline (MDLN) reported Q2 2026 adjusted EBITDA of $817 million, beating consensus, and discussed guidance impacts. The CFO said incremental earnings impact from inflationary pressure is split between transitory and permanent factors, with $200 million incremental costs and $243 million net tariff refunds excluded from adjusted EBITDA guidance. Organic growth was 9% to 10%, and signings were $650 million YTD.

Medline (NASDAQ:MDLN) reported Q2 sales growth across segments: Surgical Solutions $1.6B (+9%), Frontline Care $1.7B (+4%), Lab and Diagnostics $248M (+12%), and Supply Chain Solutions $4.1B (+16%). Adjusted EBITDA rose 13% to $1.1B, including $243M IEEPA tariff refunds. Medline raised organic sales guidance to 9%-10% but cut adjusted EBITDA to $3.3B-$3.4B.