Medline Inc's stock tumbled 6.22% in pre-market trading on Wednesday, following the release of its first quarter fiscal 2026 financial results.

The medical-surgical products provider reported a significant decline in profitability despite posting higher revenues. Net income for the quarter fell 25.8% to $239 million, while adjusted EBITDA decreased 10.6% to $776 million. Operating income dropped 26.1% to $422 million, and the gross margin narrowed by 2.5 percentage points to 25%.

The company attributed the profit decline to higher costs of goods sold, including the impact of tariffs, increased operating expenses to support new customer growth, and an employee bonus related to its recent initial public offering. These factors offset a 10.7% increase in net sales to $7.4 billion. Medline did raise its full-year organic sales growth guidance to 8.5%-9.5% while maintaining its adjusted EBITDA outlook.