Owning the GroundWide moat

Walmart (WMT) — moat facet

Walmart pays depreciation on a historic cost and captures the value of a catchment it created itself.

Walmart owns 3,728 of its 4,611 American stores, 464 of its 601 Sam's Clubs, and 125 of its 192 American distribution facilities1. The land under most of them was bought decades ago at prices that no longer exist.

Owned against leased, at 31 January 2026Walmart U.S. retail units3,728 owned of 4,611Sam's Club U.S. clubs464 owned of 601U.S. distribution facilities125 owned of 192Walmart International stores1,486 owned of 5,743Rent expense, FY2026$2,434M, about 0.34% of revenueAbroad the position inverts: 4,257 of 5,743 international stores are leased.
Walmart owns eighty-one per cent of its American stores and twenty-six per cent of its international ones — and earns 5.2% at home against 3.9% abroad.

This matters for a reason that has nothing to do with property speculation. A retailer that leases pays rent set by a landlord who knows exactly how much traffic the site generates, and who re-prices it every time the lease renews. A retailer that owns pays depreciation on a historic cost and captures the value of the catchment it created. Walmart's rent expense in fiscal 2026 was $2,434 million2 — on a $713 billion business, a rounding error, and that is the point.

It also converts an operating decision into a capital one, and that runs in two directions. Ownership means Walmart can rebuild a store, bolt a fulfilment operation onto the back of it or add a pharmacy drive-through without asking anybody. It also means the sunk cost is genuinely sunk: the estate shows $136,083 million of net property against $134,587 million of accumulated depreciation and amortisation3, which is to say the company has already consumed about half of what it built and will keep spending to hold the other half current.

The contrast with the international business is instructive and underdiscussed. Abroad, Walmart owns 1,486 of 5,743 stores and leases 4,2574 — the mirror image of the American position. International runs a 3.9% operating margin against Walmart U.S.'s 5.2%5, and while several things explain that gap, one of them is that a landlord takes a slice of every foreign store's sales and none of the American ones'.

Rent as a share of revenue is the figure to keep, about 0.34% in fiscal 20266. If Walmart ever starts selling and leasing back its estate to flatter returns, that number will rise and the advantage will be being spent rather than earned.

Moat trajectory: Holding steady

Ownership is a settled advantage rather than a growing one. The land was bought decades ago and the benefit shows up as a rent line of $2,434 million on a $713 billion business, which is about as good as it gets. The estate is also about half depreciated, so the advantage is being consumed at roughly the rate it is being replenished.

The number that tests this moat
Moat Explorer calc
Rent as a share of revenue
about 0.34%

Rent expense of $2,434M on $713,163M of revenue, because Walmart owns most of what it occupies. If Walmart ever starts selling and leasing back the estate to flatter returns, this number rises and the advantage is being spent rather than earned.

Source: Moat Explorer calculation from the FY2026 Form 10-K ↗
⚠ Threats to the moat
⚠ THREAT 01
Nobody Closes a Store They Own
A leased store closes itself at the lease expiry; an owned one can be kept open by a manager who would rather not write the impairment.
References
  1. ReportedWalmart owns 3,728 of its 4,611 American stores, 464 of its 601 Sam's Clubs, and 125 of its 192 American distribution facilities.
    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. ReportedWalmart's rent expense in fiscal 2026 was $2,434 million — on a $713 billion business, a rounding error, and that is the point.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 7 MD&A (Walmart U.S. comparable sales +4.3% with eCommerce contributing approximately 4.3 percentage points; return on assets 8.2% and return on investment 15.1% against 15.5%; net cash provided by operating activities $41,565M, payments for property and equipment $26,642M, free cash flow $14,923M against $12,660M and $15,120M; rent $2,434M; cash $10.7 billion and a $22.6 billion working capital deficit; membership income commentary) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  3. ReportedIt also means the sunk cost is genuinely sunk: the estate shows $136,083 million of net property against $134,587 million of accumulated depreciation and amortisation, which is to say the company has already consumed about half of what it built and will keep spending to hold the other half current.
    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 ↗
  4. ReportedAbroad, Walmart owns 1,486 of 5,743 stores and leases 4,257 — the mirror image of the American position.
    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 ↗
  5. Moat Explorer calcInternational runs a 3.9% operating margin against Walmart U.S.'s 5.2%, and while several things explain that gap, one of them is that a landlord takes a slice of every foreign store's sales and none of the American ones'.
    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. Moat Explorer calcRent as a share of revenue is the figure to keep, about 0.34% in fiscal 2026.
    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 ↗
Sources
Generated September 22, 2026