Costco Wholesale (NASDAQ: COST) has been posting comparable sales declines for the first time in years, yet its stock continues to climb (up 23% this year). There's good reason for investor confidence despite the harsh environment and suffering performance. In fact, there are at least three.

It's membership-tightening season. First  made headlines when it announced it was cracking down on password sharing. Costco followed not long after with its own statement. "We don't feel it's right that nonmembers receive the same benefits and pricing as our members," it said. "As we already ask for the membership card at checkout, we are now asking to see their membership card with their photo at our self-service checkout registers."

The membership fee is an integral part of the business model. Membership sharing or not, Costco's membership fee income increased 6% year over year in the 2023 fiscal third quarter (ended May 7) to over $1 billion, and accounted for 1.98% of sales versus 1.91% last year.

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Source Fool.com