As Macy's Inc. (M) struggles with disappointing sales, analysts and other experts are not ruling out the possibility of the retailer being bought out.

In recent weeks, speculation has surfaced that the operator of the Macy's and Bloomingdale's store chains might be a takeover target for private equity firms.

Investors have placed bullish bets in the options markets by buying Macy's calls. For the past three Fridays, Macy's call volume was heavier than usual as investors hoped to profit from a share rally.

Before Thursday, when the company cut its second-quarter profit forecast, Macy's shares had climbed nearly 4 percent in the past month.

"I think that it is very much in play for a takeover," said Faith Hope Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman Retail Leasing in New York. A buyout, if it happens, would likely occur this year, she said.

Consolo added that a takeover could be good for Macy's, showing confidence in the brand while bringing in new blood and fresh ideas.

"For all the negativity that surrounded Macy's for a while, it still is a very trophy name in retailing," Consolo added.

Stephanie Hoff, a senior retail analyst with Edward Jones, said private equity firms might see a chance to snatch Macy's at a cheaper price right now since sales at former May stores have been lower than expected, and recent quarterly earnings have disappointed.

"I don't completely discount (the takeover talk)," Hoff said. Private equity firms "are looking for companies that have pretty strong cash flow, and Macy's fits that profile," she said.

But Hoff added, "I think there's an equal amount of validity to the idea that this company would remain public."

BY THE NUMBERS

On Thursday, Cincinnati, Ohio-based Macy's pared its second-quarter profit forecast and reported a 2.7 percent drop in June sales at stores open at least one full fiscal year, the fifth-straight month that it fell short of same-store sales expectations. It forecast that July same-store sales could fall as much as 3 percent.

"The company is facing more of an uphill battle related to its strategy changes and integration of the former May stores," Hoff said.

Macy's, formerly known as Federated Department Stores, acquired May Department Stores in 2005 and last year converted more than 400 of those stores to the Macy's nameplate. Two months ago, the retailer said it would boost promotions in a bid to lift sales at those newer stores.

"They are trying to woo back the customer," Consolo said.

Earlier this week, Citigroup analyst Deborah Weinswig said in a research note that a takeout price of $52 for Macy's could deliver 16 percent return to a private equity firm.

"While there are a few reasons why an LBO might make sense for Macy's, especially given the slow progress of the May turnaround, we believe Macy's past LBO experience makes a transaction unlikely," Weinswig added, referring to the late 1980s buyout of Federated by Robert Campeau that eventually resulted in a bankruptcy filing.

Macy's spokesman Jim Sluzewski said the company does not comment on takeover speculation.

Macy's shares were down $1.42, or 3.5 percent, to $38.99 in late-morning trade on the New York Stock Exchange following the company's warning on second-quarter profit. The stock is up 2 percent so far this year.