Many legitimate skate or surf tricks involve going fakie (also known as riding backwards). But Volcom's (NASDAQ:VLCM) mastery of the fakie with regard to its business isn't exactly a good thing -- unless you're fond of death-defying feats of pain.

Second-quarter net income... well, ouch. Talk about a faceplant. Volcom posted a profit of a mere $872,000, or $0.04 per share, compared to $4.8 million, or $0.20 per share, this time last year. Revenue dropped 25%, to $54.2 million. Gross margin dropped to 48.6% of sales, from 48% a year ago. This epic fail is a far cry from the gains that fellow sports brand Under Armour (NYSE:UA) scored in its recent earnings report.

Given Volcom shares' dive today, investors seem to be focusing on the company's dismal third-quarter guidance, which landed well below analysts' current estimates. Even more chillingly, Volcom said the revenue it gets from Pacific Sunwear (NASDAQ:PSUN) is expected to drop a nauseating 65% in the third quarter. The retailer, Volcom's largest customer, is reconfiguring many full-priced stores to offer value goods instead, and it no longer wants to peddle Volcom's full-priced items. I'm personally curious whether PacSun's move will help or hurt retail rival (and Volcom customer) Zumiez (NASDAQ:ZUMZ).

It's hard to find many bright spots in this earnings release. Volcom does have a great balance sheet, with $96.2 million in cash and equivalents and no significant debt. That improves the company's odds of survival, but does nothing to quell worries about Volcom's overall direction.

Is the Volcom Stone gathering moss?
Volcom's "youth against establishment" ethos still fascinates me; the company's dedication to that creed seems a lot more authentic than that of many niche youth retailers. (Don't get me started on Hot Topic (NASDAQ:HOTT).) But at least one recent move may tarnish that valuable image.

In 2007, the company halted a decade-long sponsorship of the annual Warped Tour music festival, deciding to hold its own event with bands from its in-house music label instead.  The Warped Tour has real "street cred" among the demographic Volcom covets, and abandoning it for Volcom's own show might have been a mistake. From what I can gather, Volcom Entertainment bands are touring individually this year, which pales in comparison to the fairly awesome lineup the 2009 Warped Tour has assembled.

In the conference call, management insisted that the Volcom brand's still going strong. CEO Richard Woolcott said Volcom was named the No. 1 brand in action sports by several industry reports. The company is still involved in many promotional initiatives, such as the "Let the Kids Ride Free" contest, a new surf movie called BS!, and the X-Games, where it will advertise its road-tested denim.

I'm sometimes tempted to buy shares of this Motley Fool Hidden Gems pick, but I never quite pull the trigger. Right now, I'm feeling even less inclined than usual. The nasty economic environment is just the tip of the iceberg in Volcom's path. Can the company keep its young customers feeling -- and loving -- its rebellious vibe? Today's quarterly tidings give yet another reason to wait for the next wave.

Got firsthand feedback on how Volcom's faring? Think bailing on the Warped Tour was a big mistake? Sound off on Volcom in the comments below.

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Volcom, Under Armour, and Zumiez are Motley Fool Hidden Gems picks. Under Armour is also a Rule Breakers recommendation. The Fool owns shares of Volcom and Under Armour. Try any of our Foolish newsletters, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned and never could even stand on a skateboard. The Fool's disclosure policy could totally do a frontside 720 ollie, if it knew what that actually meant.