Costco Wholesale (COST 1.01%) stock is almost never available at a price that investors would consider a steal. The retailer's competitive and financial strengths are well known on Wall Street, and so even temporary declines in valuation tend to disappear quickly.

Sure, the company isn't highly profitable. But what it lacks in operating profit margin it makes up for in sales and earnings stability. Its predictable profits make it stand out in a retailing industry that's prone to wild swings on this core metric.

Costco can still surprise investors with good news, though, as it did in its late September fourth-quarter earnings report.

The headline results

Costco's headline results didn't change the broader story that investors have seen for the better part of a year. Costco is posting modest growth right now due to two related stresses on the business.

Consumers aren't spending as freely due to inflation. And they're pulling back on consumer discretionary purchases like jewelry, consumer electronics, and home furnishings. Comparable-store sales in the most recent quarter were up just 3% in the U.S. market and 4% globally.

Costco isn't alone in this challenge, though. And the shift toward spending on consumer essentials isn't as harmful to its business as it is for peers. Costco gets most of its earnings from membership fees, and so it doesn't matter much where shoppers direct their spending as long as they stay engaged with the business.

The new reason to buy Costco stock

And members are highly engaged right now. Costco said in a conference call with investors that its subscriber renewal rate ticked to a new all-time high of 92.7% in the core U.S. market. This record was reached despite the fact that the retailer makes it laughably easy to get out of a membership. Simply choose to cancel and you'll receive a full refund on your annual fee.

That renewal rate is obviously good news in that it implies that Costco members are getting plenty of value from their subscriptions in this time of rising prices. That's also clear from the company's healthy customer traffic rate. It handled 5% more traffic this past quarter compared to Walmart's (WMT -0.08%) 3% increase.

Record renewal rates are also good news because they mean that any future fee increases will be accepted by shoppers. No one likes to pay more for a product, but hikes are easier to accept when you're highly satisfied with your purchase.

The outlook for Costco

Costco is now in its sixth year between membership fee increases, meaning the next one could be announced at any time. Management has held off in recent months, possibly due to shoppers' focus on rising prices in areas like groceries. But the next increase will provide an immediate boost to cash flow, allowing the company to extend its price leadership even further.

The retail stock seems reasonably priced given those positive engagement and financial factors. Yes, investors have to pay a premium compared to peers like Walmart. Costco has a price-to-sales (P/S) ratio of about 1, while Walmart is available at a P/S of 0.7. You get about twice the dividend yield from Walmart, too, at 1.4% right now.

Costco is succeeding on the key factors that lay the groundwork for future growth, though. And by keeping its shoppers happy, it is positioning shareholders for solid returns over that time.