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Before you buy into the department store rally, consider this

The sky isn't falling. But that doesn't mean the department store space has suddenly been healed.

Shares of J.C. Penney, Kohl's, Nordstrom and Dillard's rallied on Friday, after all four reported fiscal second-quarter earnings that beat Wall Street estimates. Shares of Macy's, which likewise topped analysts' expectations, gave up some of the gains they logged Thursday, but were still up more than 15 percent on the week.

Investors cheered the group's improvement, after a dismal first quarter that brought back memories of the financial crisis. Yet while these stores showed much-needed signs of stabilization in the second quarter, analysts cautioned that investors shouldn't get overly excited by their results.

"It's important to note that these department store earnings are still down year-over-year," said Ken Perkins, president of Retail Metrics. "Maybe they're slowly turning a corner but they're still facing all the same pressures that they've been facing for the past several years."

Indeed, Retail Metrics' latest forecast calls for department stores' second-quarter earnings to fall 97 percent compared with the prior-year period, or 13 percent when stripping out Sears. Though that's better than the firm's forecast ahead of the announcements, it nonetheless signals a contraction.

Revenues are also shrinking at these stores, with J.C. Penney being the lone department store notching year-over-year topline growth during the three-month period. Nordstrom's results were dented by a shift of its anniversary sale, part of which moved into the third quarter this year. Yet this was the first quarter its revenue declined since the financial crisis.

"They [department stores] continue to face pressures from a number of fronts," Perkins said.

A customer browses women's jewelry at the Macy's flagship store in New York.
Jin Lee | Bloomberg | Getty Images
A customer browses women's jewelry at the Macy's flagship store in New York.

Among those pressures are a shift in spending toward experiences and wellness, and Amazon's rapid growth. Amazon notched a 32 percent gain in sales from electronics and other general merchandise in North America during the second quarter.

Despite these pressures, there are a few trends fueling optimism over department stores for the second half of the year. Several of these retailers said their trends improved as the months progressed, and indicated back-to-school is off to a strong start.

And after a long stretch of being bogged down with too much inventory, they have finally gotten their merchandise levels under control. That's "the best news that we're seeing," said Stacey Widlitz, president of SW Retail Advisors and a CNBC contributor.

"Finally were heading into holiday right-sized with our inventory," she said.

That should limit the amount of unplanned promotions retailers run, and boost their gross margins. They will also be facing easy comparable figures from last year's fourth quarter, when warm weather prevented shoppers from stocking up on winter coats and boots.

Because of these tailwinds, Perkins said he expects retailers to record low- to mid-single-digit earnings gains in the second half. Yet Ron Friedman, a co-leader in Marcum's retail and consumer group, isn't so sure.

Even if retailers have the right amount of inventory, he's skeptical they can persuade shoppers to pay full price for items, when they've become so accustomed to buying goods on discount.

"Department stores, they only know one word: Sale," he said, adding there isn't enough inventiveness in apparel to drum up interest with shoppers. "I think that [investors] are too optimistic."