Macy’s (M) Stock Falls Ahead of Q1 Results, Jim Cramer Weighs In

NEW YORK (TheStreet) -- Macy's (M) - Get Report stock is down 1.51% to $37.17 in early afternoon trading on Tuesday before the Cincinnati-based retailer reports its fiscal 2016 first quarter results before the market open on Wednesday.

Macy's is expected to report a year-over-year decline in earnings and revenue as the retail sector struggles to deliver significant growth amid falling mall traffic.

Wall Street is anticipating earnings of 37 cents per share on revenue of $5.95 billion for the latest quarter, compared with earnings of 56 cents per share on revenue of $6.23 billion for the fiscal 2015 first quarter.

Macy's comparable store sales are estimated to be down 3.1% for the quarter, although JPMorgan analysts expect same store sales to decline as much as 6%.

"Not unlike Gap (GPS), Macy's has this existential problem, which is where do they fit in the food chain," TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUScharitable trust, said in the video, above. "Macy's has been a survivor, but now it's challenged in a way it's never been challenged."

Macy's is now competing with Amazon.com (AMZN), the e-commerce giant that has changed the way people shop, Cramer explained, adding that "the next generation does not want to go to Macy's."

Separately, Macy's has a "hold" rating and a letter grade of C+ at TheStreet Ratings because of the company's attractive valuation levels, expanding profit margins and notable return on equity, which is offset by deteriorating net income, generally higher debt management risk and weak operating cash flow.

You can view the full analysis from the report here: M

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.