Among the biggest losers in Friday’s early trading are Zumiez (Nasdaq: ZUMZ) and Facebook (NYSE: FB).

The retail sector can be a fertile area of growth for companies that strike a hot new image or manage to capture a burgeoning new niche. Sales can grow at a rapid pace, at least until the fad cools or me-too competitors start to appear. Once-hot retailer Zumiez, which caters to the skateboard, snowboard and daredevil cyclist set, may be settling into a phase of maturity. 

On Thursday evening, Zumiez announced fiscal second-quarter results that were roughly in-line with consensus forecasts, but issued sobering profit guidance for the current quarter: Sales are expected to grow a respectable 20% from the prior year’s third quarter, but much of those gains will be the result of a higher store count and price increases. Core traffic at the company’s stores is growing at a notably slower rate. Of greater concern: Zumiez’s costs are rising at a rapid clip, so earnings per share in the current quarter will likely be in a range of 42 to 45 cents, well below the consensus forecast of 54 cents. That would be roughly flat with year-ago results.

So has Zumiez’s niche opportunity played out? Said another way, is the company’s projected $760 million in projected fiscal (January) 2014 sales about all investors can expect? We probably won’t know until the economy is on firmer footing and teens and twentysomethings have more spending money. But for now, there’s little reason to expect a re-acceleration of growth. 

Will Facebook ever find a floor?
On a day when the broader market is posting solid gains, shares of Facebook are hitting fresh post-IPO lows. These days, trading is dominated by investors that fear the coming wave of newly-unlocked shares hitting the market. And in the face of more supply of stock coming our way, few are interested in stepping in. That supply/demand backdrop for shares has now overtaken any discussion of valuations. 

When shares of Facebook opened for trading late in the morning of May 18, shares briefly touched $45, valuing the company at around $97 billion. With today’s fresh 52-week low, that value has fallen to around $40 billion. Pretty soon now, the likes of Google (Nasdaq: GOOG) or Microsoft (Nasdaq: MSFT) will start wondering if it’s advisable to snap up this busted IPO. If they had a shot to buy Facebook six months ago for $40 billion when it was still private, they likely would have seriously considered such a move.

Now, this is a falling knife that no one wants to touch. 

Make no mistake, this stock will reverse course. It has too large a user base to be so easily dismissed. Yet while the prospect of a tidal wave of shares hitting the market in coming months still looms, this is an untouchable stock. In a note downgrading Facebook’s price target from $35 to $23 on Friday morning, Merrill Lynch analysts note that with 40% of the share count getting unlocked on Nov. 14, “we wouldn’t expect stock to see buying momentum until December.”

That logic may be off base. Note that shares of Yelp (Nasdaq: YELP) rallied sharply on Wednesday as a share lock-up expired. Investors waiting for that event pounced when it became apparent that insiders chose not to unleash a huge amount of stock onto the market. Maybe Nov.14 is the date that interested buyers of Facebook should be considering.  

Action to Take –> With a $40 billion valuation that drops by the day, Facebook is bound to catch a break at some point. It appears wise to await the Nov. 14 lock-up expiration date, but this is starting to become an intriguing proposition for buyers.