Shares of Macy's, Inc. (M Quick QuoteM - Free Report) touched a 52-week low of $27.83 yesterday, before recovering a bit to close the day at $28.37. In fact, the company’s dwindling top- and bottom-line performance has been a primary concern for quite some time now.

A glimpse of Macy's share price movement reveals that it has underperformed both the Zacks categorized Retail – Regional Department Stores industry and the broader sector in the past one year. The stock plunged 34.7%, compared with the industry’s decline of 33.6%. In contrast, the Zacks categorized Retail-Wholesale sector returned 7.5%. Notably, shares of this leading department store retailer fell 12.2% since it came out with fourth-quarter fiscal 2016 results.

A challenging retail landscape, stiff competition from online retailers and soft store traffic has been hurting the company’s performance. This is quite evident from its fourth-quarter fiscal 2016 results, wherein both sales and earnings per share declined year over year. While net sales decreased 7.4%, 3.9%, 4.2% and 4% in the first, second, third and fourth quarters of fiscal 2016, respectively; earnings per share descended 28.6%, 15.6%, 69.6% and 3.3% during the respective quarters.

Additionally, management provided a bleak outlook for fiscal 2017. It envisions total sales to decline in the band of 3.2–4.3% and expects comps on an owned plus licensed basis to decrease in the band of 2–3%. The company also projects adjusted earnings in $2.90–$3.15 per share range.

However, the Zacks Consensus Estimate of 35 cents and $3.46, for the first quarter and fiscal 2017 increased 16 cents and 23 cents, respectively, over the past 60 days.

In fact, Macy’s has announced slew of measures revolving around stores closures, cost containment, real estate strategy and investment in omni-channel capabilities to enhance its sales, profitability and cash flows. In addition, management is developing its eCommerce business and Macy’s Backstage off-price business, along with the expansion of Bluemercury and online order fulfillment centers. Also, the company has been widening its operations via deals and collaborations to expand its customer base.

Moving ahead, we believe the company’s consistent focus on price optimization, inventory management, merchandise planning, and private label offering are the primary catalysts, facilitating in meeting customer-oriented demand and improving in-store shopping experience. Notably, Macy’s carries a Zacks Rank #3 (Hold), with a VGM Score of “A” and long-term earnings growth rate of 8.5%, which boost investors’ confidence. Further, these growth initiatives may spark a turnaround in Macy’s performance.

Key Picks

Better-ranked stocks in the broader Retail-Wholesale space include The Children's Place, Inc. (PLCE Quick QuotePLCE - Free Report) , Kate Spade & Company and Foot Locker, Inc. (FL Quick QuoteFL - Free Report) .

The Children's Place, with a long-term earnings growth rate of 10.3%, has surged nearly 46%, in the past six months. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kate Spade & Company, a Zacks Rank #1 stock, has jumped 62.3% in the past three months. Moreover, it has an impressive long-term earnings growth rate of 28.3%.

Foot Locker, which carries a Zacks Rank #2 (Buy), has increased 14.8% in the past one year. Further, it has a long-term earnings growth rate of 9.7%.

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