The Zacks Consumer Staples Sector has been highly defensive throughout 2022, increasing a solid 3.3% in value and easily outperforming the S&P 500. However, the sector has lagged the general market over the last month.

Below is a table illustrating the sector’s performance vs. the S&P 500 over several timeframes.

Image Source: Zacks Investment Research

One company residing within the sector, Grocery Outlet (GO Quick QuoteGO - Free Report) , is on deck to report quarterly results on Tuesday, August 8^th, after the market close.

Grocery Outlet is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently owned and operated stores. The company executed its IPO in June of 2019.

In addition, the company boasts a Zacks Rank #2 (Buy) with an overall VGM Score of a C. How does the grocery giant shape up heading into the print? Let’s take a closer look.

Share Performance & Valuation

GO shares are up a mind-boggling 60% year-to-date, crushing the S&P 500’s performance and reflecting that buyers have remained in complete control.

Image Source: Zacks Investment Research

Over the last month, Grocery Outlet shares have lagged the general market by a fair margin, as illustrated in the chart below.

Image Source: Zacks Investment Research

Stocks in the Consumer Staples sector generate revenue in the face of both good and bad economic times, helping explain why share performance has been so strong in 2022.

The company’s forward earnings multiple of 57.5X is undoubtedly on the extreme side, representing a steep 91% premium relative to its Zacks Sector.

Grocery Outlet carries a Style Score of a C for Value.

Image Source: Zacks Investment Research

Quarterly Estimates

Two analysts have upped their earnings outlook for the quarter to be reported over the last 60 days, a bullish signal. The Zacks Consensus EPS Estimate resides at $0.24, reflecting a solid 4.3% uptick in quarterly earnings year-over-year.

Image Source: Zacks Investment Research

Grocery Outlet’s top-line appears to be in excellent health as well – the company is forecasted to have generated $860 million in revenue for the quarter, good enough for a double-digit 11% uptick from year-ago quarterly sales of $775 million.

Quarterly Performance & Market Reactions

Since its IPO, Grocery Outlet has repeatedly reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in all but two quarters. Just in its latest report, the grocery retailer recorded a notable 10% EPS beat.

Top-line results have primarily been strong as well, with the company registering six top-line beats over its last eight quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

Image Source: Zacks Investment Research

However, the market hasn't reacted well historically to the company’s quarterly reports, with shares moving down following the print in four of its previous six quarters.

Putting Everything Together

Grocery Outlet shares have been blazing hot year-to-date but have lagged the general market over the last month. In addition, shares trade at very high valuation multiples.

Analysts have been bullish for the quarter to be reported, and both the top and bottom-lines are forecasted to register solid growth.

Furthermore, quarterly results have primarily exceeded estimates, but the market hasn’t reacted well to the company’s recent earnings releases.

Heading into the print, Grocery Outlet (GO Quick QuoteGO - Free Report) carries a Zacks Rank #2 (Buy) with an Earnings ESP Score of 3.6%.