It has been about a month since the last earnings report for Macy's (M). Shares have lost about 23.3% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Macy's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Macy's Q2 Loss Narrower Than Expected, Sales DeclineMacy’s reported better-than-expected second-quarter fiscal 2020 results. This omni-channel fashion retailer posted narrower-than-expected loss. Further, the company’s net sales also surpassed the Zacks Consensus Estimate. However, both the top and the bottom lines declined sharply from the year-ago period.Markedly, management highlighted that all three brands namely, Macy’s, Bloomingdale’s and Bluemercury, witnessed stronger-than-anticipated performance owing to sales recovery in stores. Also, the company's digital business remained robust.In spite of the sturdy results, Macy’s holds a conservative approach for the back half of the year. In an attempt to improve performance, Macy’s has been taking steps such as integration of operations as well as developing omnichannel capabilities. The company’s curbside pickup services have been receiving positive response from customers. Undoubtedly, the company has been focusing on cutting operating expenses and managing inventory. Additionally, the company is undertaking evaluation of store portfolio and technology improvements.Let’s Delve DeepMacy’s reported adjusted loss of 81 cents a share, narrower than the Zacks Consensus Estimate of loss of $1.78. Notably, the company had posted adjusted earnings of 28 cents a share in the year-ago period. Lower net sales hurt the company’s bottom line.Net sales of $3,559 million came ahead of the Zacks Consensus Estimate of $3,511 million. However, the top line declined 35.8% on a year-over-year basis. Additionally, we note that comparable sales were down 34.7% on an owned basis and down 35.1% on an owned plus licensed basis.Impressively, digital sales surged 53% from the year-ago quarter, and represented 54% of total owned comparable sales.Furthermore, gross margin expanded 650 basis points to 23.6% on a sequential basis owing to improved retail margins from mix and better sell through of clearance merchandise. Macy’s reported adjusted EBITDA loss of $142 million. The company had reported adjusted EBITDA of $402 million in the year-ago quarter.Notably, SG&A expense declined 35.8% year over year to $1,398 million, thanks to better expense management and Polaris strategy. As a percentage of net sales, SG&A expense remained almost flat at 39.2% compared with the prior-year quarter.Other Financial AspectsMacy’s had cash and cash equivalents of $1,395 million as of Aug 1, 2020, which portrays a sharp rise from cash and cash equivalents of $674 million as of Aug 3, 2019. Inventory declined 29% from a year ago, allowing the company to exit the quarter in a clean inventory position. The company concluded the quarter with about $3 billion of untapped capacity in the new asset-based credit facility. Total debt and shareholders’ equity were $5,390 million and $2,324 million, respectively, as of Aug 1, 2020.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted 7.17% due to these changes.VGM ScoresAt this time, Macy's has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Macy's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Macys, Inc. (M): Free Stock Analysis Report To read this article on Zacks.com click here.