Macy's may shut down even more stores (M)

But analysts and industry experts say it needs to close even more locations to revive business.

The market "probably wants to see another 100 Macy's stores close," Jan Kniffen, the CEO of the consulting firm Worldwide Enterprises, told CNBC on Thursday.

Cowen & Co. analyst Oliver Chen echoed that statement in a research note Thursday.

"We fear that Macy's may need to close more stores than previously announced, and share losses vs. both off-price (TJ Maxx and Ross Stores) and Amazon will continue in the foreseeable future," Chen wrote.

In a call with analysts on Thursday, Macy's CEO Jeff Gennette acknowledged that Macy's may not be done closing stores in the near term.

"I'm not going to say we're not going to close more stores," Gennette said. "We do have to stabilize our brick-and-mortar business ... That's where a majority of our business is still done."

In late January, Macy's had 673 stores in operation, down from nearly 800 in 2014. By the end of this year, the chain's store base is expected to drop to about 600.

Gennette said the mass closings were negatively affecting business in the near term but were necessary because the US had too many stores.

"The contraction puts more pressure on some of our mall-based stores, where we have already seen a slowdown in traffic," Gennette said. "It will take some time," he said, to see how consolidations, closings, and bankruptcies will affect the retailer.

He said the company was keeping a close watch on "how store trends evolve" and would keep looking for opportunities in which selling a Macy's location's real estate would be more valuable than keeping the store in business.

Macy's is also looking at ways to shrink some of its full-line stores by renting out floors to other retailers, the company said.

Macy's sales fell by 7.5% to $5.3 billion in the most recent quarter, and same-store sales, or sales at stores open at least a year, fell by 5.2%.

"We don't have our head in the sand, as for the significant challenges we face in trying to get the business growing again," Gennette said. "These challenges are secular and not cyclical."