The Zacks Consumer Staples Sector has displayed remarkable relative strength in 2022, down roughly 7% vs. the S&P 500’s 17% decline.

Companies in the sector generate consistent revenue in the face of both good and bad economic situations, helping explain why it’s held up so well.

Image Source: Zacks Investment Research

A mega-popular stock in the sector, RH (RH Quick QuoteRH - Free Report) , is on deck to unveil Q2 earnings on Thursday, September 8^th, after market close.

Formerly known as Restoration Hardware, RH is a leading luxury retailer in the home furnishing space. RH offers dominant merchandise assortments across a growing number of categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and teen furnishings.

As it stands, the company carries a Zacks Rank #3 (Hold) with an overall VGM Score of an A.

How does the luxury retailer stack up heading into the print? Let’s take a closer look.

Share Performance & Valuation

RH shares have faced a challenging road in 2022, losing more than 50% in value and vastly underperforming the general market.

Image Source: Zacks Investment Research

Over the last month, RH shares have continued their downwards trajectory, losing nearly 20% in value and lagging behind the S&P 500 in this timeframe as well.

Image Source: Zacks Investment Research

The poor price action of RH shares indicates that sellers have been in control all year long, as we’ve seen with many stocks in 2022.

Still, RH shares trade at rock-solid valuation multiples, further displayed by its Style Score of an A for Value.

The company’s 10.3X forward earnings multiple is nowhere near its five-year median of 18.9X and represents a staggering 47% discount relative to its Zacks Sector.

Image Source: Zacks Investment Research

Quarterly Estimates

A singular analyst has lowered their earnings outlook for the quarter to be reported over the last several months, with the Consensus Estimate Trend slipping a marginal 1.2%. The Zacks Consensus EPS Estimate of $6.82 reflects a 20% drop off in quarterly earnings Y/Y.

Image Source: Zacks Investment Research

RH’s top-line is also undergoing a bit of turbulence – the Zacks Consensus Sales Estimate resides at $970 million, penciling in a slight 2% Y/Y drop in quarterly revenue.

Quarterly Performance & Market Reactions

RH has been on a spectacular earnings streak, exceeding the Zacks Consensus EPS Estimate in each of its previous ten quarters. Just in its latest print, the company recorded a sizable 43% bottom-line beat.

Top-line results have also been stellar, with RH registering seven revenue beats over its last eight quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

Image Source: Zacks Investment Research

In addition, for day-traders who prefer to play the long side – shares have moved upwards following five of the company’s previous six quarterly prints, all by at least 4% in each instance.

Putting Everything Together

RH shares have struggled to break their downtrend in 2022, underperforming the general market over several timeframes.

Still, shares trade at rock-solid valuation multiples, further bolstered by its Style Score of an A for Value.

One analyst has lowered their earnings outlook over the last several months, and estimates allude to a decrease in revenue and earnings.

Further, RH has consistently exceeded quarterly estimates, and the market has had favorable reactions following the vast majority of its previous six releases.

Heading into the print, RH (RH Quick QuoteRH - Free Report) carries a Zacks Rank #3 (Hold) paired with an Earnings ESP Score of 4.3%.