Traditional retailers like Macy's continue to fight an uphill battle due to dwindling foot traffic and shifting consumer demand for e-commerce and buzzy direct-to-consumer brands.

Performance in the second quarter of 2019 fell "well below expectations," citing surplus inventory as a "mounting problem" during the period. In an effort to clear excess product, the retailer made significant store-wide markdowns, contributing to a net sales drop to $5.546 billion from $5.572 billion at the same time last year. Same-store sales grew by 0.2%.

Jeff Gennette attributed Macy's inventory troubles to three main factors: low performance in sectors like women's sportswear, private labels, and home goods; slow sales of warm weather apparel; and a decline in international tourism.

Macy's CFO Paula Price said on the call that while the brand was "not pleased" with its performance, it's focusing on more strategic inventory allocation moving forward and she's confident it will make a bounce back.

Both Gennette and Price noted the industrywide challenges plaguing traditional retailers, as consumers flock to e-commerce and buzzy direct-to-consumer brands. In an attempt to attract younger, more eco-conscious shoppers, Gennette announced a pilot partnership with ThredUp, which will feature resale clothing in 40 select stores.

Additionally, Macy's-owned Bloomingdales is looking to capitalize on the booming rental industry with a recently announced rental program called My List, which Gennette said Macy's aims to emulate down the road.