INCOME TAXES |
6 Months Ended |
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Jun. 27, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES The Company’s effective income tax rate was 40.92% and 7.16% for the three months ended June 27, 2026 and June 28, 2025, respectively, and 28.08% and 6.02% for the six months ended June 27, 2026 and June 28, 2025, respectively. The Company’s effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including the operating partnership, tax incentives, foreign rate differences, state income taxes, non-deductible expenses, and non-taxable income. The increase in the effective income tax rate as compared to prior year is primarily driven by the Reorganization in connection with the IPO, which resulted in a greater portion of income being subject to U.S. federal and state income taxes. Prior to the completion of the IPO, the Company executed the Reorganization, resulting in Medline Inc. becoming the sole general partner of Medline Holdings, with its sole material asset being a controlling equity interest in Medline Holdings. Following the IPO, Medline Inc. is required to pay U.S. federal and state income taxes as a corporation on its share of Medline Holdings’ taxable income. For the three and six months ended June 27, 2026, the Company’s effective tax rate differed from the 21% U.S. federal statutory rate primarily due to its organizational structure and ownership composition, including non-controlling interests of Medline Holdings. The effective tax rate is higher due to the impact of the losses incurred as a result of the fire at our distribution center in Tracy, California for which no tax benefit is recorded at this time. The ultimate tax impact may differ as additional losses, costs, insurance recoveries, and other related matters are determined. For the three and six months ended June 28, 2025, the Company’s effective tax rate differed from the 21% U.S. federal statutory rate primarily due to the operating partnership, tax incentives, foreign rate differences, state income taxes, non-deductible expenses, and non-taxable income. In connection with the Reorganization and the IPO, the Company also entered into a TRA with certain pre-IPO owners. See Note 7 —Tax Receivable Agreement for additional information. During the six months ended June 27, 2026, the Company recorded additional TRA liability of $862 million and a deferred tax asset of $391 million (net of a $209 million valuation allowance), principally due to the effects of the May 2026 Resale Offering, the March 2026 Resale Offering, and other exchanges of Incentive Units and Common Units.
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