Pacific Sunwear Takes A Dive After Hours (PSUN), Wall Street Strategies Reports

Shares of Pacific Sunwear PSUN are down roughly 7% in after hours trading in response to a 4Q10 earnings miss and the most disappointing guidance from the teen apparel sector for 1Q11, Wall Street Strategies reports.

“The stock's rebound intraday was a clear head fake, perhaps a function of bets being made against the stock ahead of earnings,” Wall Street Strategies writes. “In our view, the quarter and guidance shed light on the following factors:

“(1) Major credibility loss in the minds of the core surfwear and skatewear communities with the push to private level Bullhead offerings.

“(2) Share loss to Zumiez, which boasts an authentic feel to its stores (almost akin to a small local skate shop) and the name brands needed to boost street cred.

(3) Creative, yet worrying amount of promotions at the chain to keep inventory moving, specifically within the challenging female categories. The tone on the press release, and likely to follow on the earnings call, is decidedly more cautious than that of 3Q10.”

Pacific Sunwear closed today at $4.31.