✦ The Nineteen Per Cent That Grows FastestNarrow moat

Walmart (WMT) — the future bets

Emerging markets skipped the physical build-out the United States spent forty years on, and it shows in the eCommerce penetration.

Walmart International is 19% of consolidated net sales1 and it has been growing at roughly twice the pace of the United States.

Walmart International net sales by market ($bn), FY2026$52.5bnMexico andCentral America$29.6bnOther$24.6bnChina$23.7bnCanadaChina grew from $17.0bn two years earlier; eCommerce is about 27.5% of segment net sales.
Nineteen per cent of net sales, growing at twice the American rate, with digital penetration already ahead of the United States — and 4,257 of 5,743 stores on somebody else's lease.

The shape is unusual. It is 5,743 stores across 18 countries2, 4,257 of them leased rather than owned — the inverse of the American estate3 — and it is dominated by three positions: Mexico and Central America at $52,492 million of net sales, China at $24,623 million, and Canada at $23,724 million4. China is the one that moves: up from $17,011 million two years earlier, a 45% increase, in a market where most Western retailers have retreated.

Its eCommerce is further along than the American business by one measure that matters. International eCommerce was about $35.8 billion in fiscal 2026 against $24.8 billion two years earlier — approximately 27.5% of the segment's net sales, against 20.6% at Walmart U.S.5. Emerging markets skipped the physical retail build-out that the United States spent forty years on.

Then there is India. Walmart took majority stakes in Flipkart and PhonePe in 20186, and both sit inside the international business at a scale Walmart does not separately disclose. The risks there are legal rather than commercial: the Directorate of Enforcement has issued show-cause notices to Flipkart over foreign direct investment rules, and the Competition Commission of India has an investigation running7.

The strategic case is that international is where Walmart's playbook works without an incumbent Walmart in the way. The strategic caution is that it earns 3.9% against Walmart U.S.'s 5.2%8, partly because it pays rent.

Watch international net sales in constant currency: up 7.9% in the June 2026 quarter against a reported 12.8%9. The difference is the exchange rate, and the exchange rate is not a strategy.

Moat trajectory: Widening

International net sales grew 12.8% in the June quarter, 7.9% in constant currency, against low single digits at home, and its eCommerce penetration is already ahead of the American business at about 27.5%. China grew 45% in two years in a market most Western retailers have left.

The number that tests this moat
Reported
International net sales growth, constant currency
+7.9% against a reported +12.8%

The difference is the exchange rate, and the exchange rate is not a strategy. International is 19% of net sales across 5,743 stores in 18 countries, with eCommerce penetration of about 27.5% against 20.6% at Walmart U.S.

Source: Walmart second-quarter fiscal 2027 results (August 20, 2026) ↗
References
  1. ReportedWalmart International is 19% of consolidated net sales and it has been growing at roughly twice the pace of the United States.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 1 Business and Item 2 Properties (approximately 280 million customers a week across more than 10,900 stores in 19 countries; 2.1 million associates, 1.6 million in the U.S.; 4,611 Walmart U.S. retail units of which 3,728 owned, 601 Sam's Clubs of which 464 owned, 5,743 international stores of which 1,486 owned; 3,566 supercenters at 633,724 thousand square feet, 351 discount stores at 36,609, 694 neighborhood markets and small formats at 36,609/28,375 with a 42,000 average; 192 U.S. and 179 international distribution facilities, 149 owned; pickup and delivery at over 8,400 locations globally; EDLP and EDLC; private brands; competition; Flipkart and PhonePe majority stakes in 2018) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  2. ReportedIt is 5,743 stores across 18 countries, 4,257 of them leased rather than owned — the inverse of the American estate — and it is dominated by three positions: Mexico and Central America at $52,492 million of net sales, China at $24,623 million, and Canada at $23,724 million.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 1 Business and Item 2 Properties (approximately 280 million customers a week across more than 10,900 stores in 19 countries; 2.1 million associates, 1.6 million in the U.S.; 4,611 Walmart U.S. retail units of which 3,728 owned, 601 Sam's Clubs of which 464 owned, 5,743 international stores of which 1,486 owned; 3,566 supercenters at 633,724 thousand square feet, 351 discount stores at 36,609, 694 neighborhood markets and small formats at 36,609/28,375 with a 42,000 average; 192 U.S. and 179 international distribution facilities, 149 owned; pickup and delivery at over 8,400 locations globally; EDLP and EDLC; private brands; competition; Flipkart and PhonePe majority stakes in 2018) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  3. ReportedIt is 5,743 stores across 18 countries, 4,257 of them leased rather than owned — the inverse of the American estate — and it is dominated by three positions: Mexico and Central America at $52,492 million of net sales, China at $24,623 million, and Canada at $23,724 million.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 1 Business and Item 2 Properties (approximately 280 million customers a week across more than 10,900 stores in 19 countries; 2.1 million associates, 1.6 million in the U.S.; 4,611 Walmart U.S. retail units of which 3,728 owned, 601 Sam's Clubs of which 464 owned, 5,743 international stores of which 1,486 owned; 3,566 supercenters at 633,724 thousand square feet, 351 discount stores at 36,609, 694 neighborhood markets and small formats at 36,609/28,375 with a 42,000 average; 192 U.S. and 179 international distribution facilities, 149 owned; pickup and delivery at over 8,400 locations globally; EDLP and EDLC; private brands; competition; Flipkart and PhonePe majority stakes in 2018) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  4. ReportedIt is 5,743 stores across 18 countries, 4,257 of them leased rather than owned — the inverse of the American estate — and it is dominated by three positions: Mexico and Central America at $52,492 million of net sales, China at $24,623 million, and Canada at $23,724 million.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - consolidated financial statements and notes (total revenues $713,163M, net sales $706,413M, membership and other income $6,750M, cost of sales $535,395M, operating expenses $147,943M, operating income $29,825M, net income attributable to Walmart $21,893M, diluted EPS $2.73; balance sheet including inventories $58,851M, accounts payable $63,061M, property and equipment net $136,083M, accumulated depreciation $134,587M, depreciation and amortisation $14,203M; segment note; disaggregation of revenue by merchandise category and by market, and eCommerce net sales by segment) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  5. Moat Explorer calcInternational eCommerce was about $35.8 billion in fiscal 2026 against $24.8 billion two years earlier — approximately 27.5% of the segment's net sales, against 20.6% at Walmart U.S..
    Moat Explorer calculation from figures in Walmart's own filings: global eCommerce of about $150.4 billion (Walmart U.S. $99.6B + International $35.8B + Sam's Club $15.0B) against $120.9 billion, a $29.5 billion increase against a $31,875M rise in net sales ($706,413M against $674,538M), about 92%; Walmart U.S. selling floor of 698.7 million square feet (633,724 + 36,609 + 28,375 thousand) and net sales per store of $104.7 million ($482,975M over 4,611 stores); operating margin 4.18% ($29,825M/$713,163M) against 4.31% ($27,012M/$648,125M); net margin 3.07%; gross profit rate 24.2% ($171,018M/$706,413M); grocery 59.1% of Walmart U.S. net sales ($285,482M/$482,975M) against 59.8% ($264,210M/$441,817M) and grocery growth of 3.4%; general merchandise to grocery ratio 0.40 against 0.43; health and wellness +26.7% ($54,898M to $69,547M); payables less inventories $4,210M ($63,061M less $58,851M); rent 0.34% of revenue ($2,434M/$713,163M); capital expenditure 64% of operating cash flow ($26,642M/$41,565M); a 1% overrun on $147,943M of expense is $1,479M; eCommerce penetration 27.5% international ($35.8B/$130,423M) and 20.6% at Walmart U.S. ($99.6B/$482,975M); shareholder returns $15,587M ($7,507M dividends plus $8,080M repurchases) against $14,923M of free cash flow; Q2 FY2027 net income attributable down 9.4% ($6,366M against $7,026M); Walmart U.S. comparable sales of about 3.9% excluding the 125 basis point pharmacy headwind — FY2024-Q2 FY2027 · publ. September 2026 · source ↗
  6. ReportedWalmart took majority stakes in Flipkart and PhonePe in 2018, and both sit inside the international business at a scale Walmart does not separately disclose.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 1 Business and Item 2 Properties (approximately 280 million customers a week across more than 10,900 stores in 19 countries; 2.1 million associates, 1.6 million in the U.S.; 4,611 Walmart U.S. retail units of which 3,728 owned, 601 Sam's Clubs of which 464 owned, 5,743 international stores of which 1,486 owned; 3,566 supercenters at 633,724 thousand square feet, 351 discount stores at 36,609, 694 neighborhood markets and small formats at 36,609/28,375 with a 42,000 average; 192 U.S. and 179 international distribution facilities, 149 owned; pickup and delivery at over 8,400 locations globally; EDLP and EDLC; private brands; competition; Flipkart and PhonePe majority stakes in 2018) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  7. ReportedThe risks there are legal rather than commercial: the Directorate of Enforcement has issued show-cause notices to Flipkart over foreign direct investment rules, and the Competition Commission of India has an investigation running.
    Walmart Form 10-Q, quarterly period ended July 31, 2026 - condensed consolidated financial statements and notes (total revenues $187,937M, operating income $9,383M, other losses of $1,200M against gains of $2,708M, net income attributable to Walmart $6,366M and diluted EPS $0.80; segment note; the gain-contingency note recording approximately $2.9 billion of IEEPA tariff refunds received from U.S. Customs and Border Protection as a reduction of cost of sales; the statement that less than one third of what Walmart sells in the U.S. is imported) — Q2 FY2027 (quarter ended July 31, 2026) · publ. August 28, 2026 · source ↗
  8. ReportedThe strategic caution is that it earns 3.9% against Walmart U.S.'s 5.2%, partly because it pays rent.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - consolidated financial statements and notes (total revenues $713,163M, net sales $706,413M, membership and other income $6,750M, cost of sales $535,395M, operating expenses $147,943M, operating income $29,825M, net income attributable to Walmart $21,893M, diluted EPS $2.73; balance sheet including inventories $58,851M, accounts payable $63,061M, property and equipment net $136,083M, accumulated depreciation $134,587M, depreciation and amortisation $14,203M; segment note; disaggregation of revenue by merchandise category and by market, and eCommerce net sales by segment) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  9. ReportedWatch international net sales in constant currency: up 7.9% in the June 2026 quarter against a reported 12.8%.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
Sources
Generated September 22, 2026