Medline is expanding its automated distribution network while undertaking a multi-year overhaul of manufacturing quality systems, according to the company’s third quarter disclosures.
A new distribution center in Tracy, Calif., remains scheduled to open by year-end following the June fire at an existing facility. Its AutoStore system, Medline’s largest installation to date, is expected to improve less-than-case picking capacity and throughput beginning in mid-2027.
Medline also plans three distribution centers totaling approximately 3 million square feet in Dallas-Fort Worth, Southern California and Michigan. All three are expected to incorporate AutoStore automation.
Alongside the distribution expansion, independent third parties are assessing quality systems at more than 30 Medline manufacturing facilities under its Global Quality Action Plan. Management expects the effort to take multiple years, with investments in personnel, processes and technology accompanying remediation of affected products.
Medline reported $348 million in capital expenditures during the first nine months of 2026, primarily for distribution automation, new facilities and expanded kitting manufacturing capacity. The Tracy fire generated $316 million in net losses during that period. Third-quarter sales rose 10.4% to $7.9 billion, while net income declined 1.2% to $318 million, reflecting inflation-related inventory costs, higher operating expenses and customer mix.
