CHICAGO, May 07, 2008 (BUSINESS WIRE) ----Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Sean P. Smith, who discusses Pool Corporation (Nasdaq: POOL), Shutterfly (Nasdaq: SFLY), Regis Corporation (NYSE: RGS) and Town Sports International (Nasdaq: CLUB).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

There are many concerns on the Street related to a slowdown in consumer spending. How has this theme impacted some of the consumer discretionary stocks that you follow?

To this point, the slowdown has played out about as expected, with companies providing products or services that are deemed to be the most discretionary being hit hardest.

For example, Pool Corporation (Nasdaq: POOL), which is the world's largest wholesale distributor of swimming pool supplies, equipment, and related products, has been negatively impacted by and the pressures on consumer spending. The company posted a loss in Q1 versus a profit in the year ago period.

Another stock that is feeling the impact of economic pressures on the consumer is Shutterfly (Nasdaq: SFLY), a web-based company that provides online photo sharing services and personalized products such as cards, calendars, and photo-books. The company generally runs at a loss through the first three quarters of the year, before becoming profitable in the fourth quarter. Like many companies relying upon the consumer, SFLY is holding out hope that macroeconomic conditions improve by year-end.

What about companies that seem to fall within a grey area between "discretionary" and "necessity"? Have their operating results held up any better?

For the most part, they have. These stocks can even spur a debate as to what it actually means to provide a discretionary service.

Regis Corporation (NYSE: RGS), for example, owns, operates, and franchises hair and retail product salons, and is the largest company in the hair care industry. Certainly, haircuts are a necessity item in the long-run. The timing of a haircut, however, can be viewed as discretionary in the short run. With economic pressures on the consumer, some customers that may have previously scheduled haircuts once a month may push that frequency back to once every six weeks, for example. While we like the company's overall positioning, our hold rating in the short-term is based upon the difficult operating environment that Regis currently faces. We project that fiscal 2008 earnings will be down slightly year-over-year, before rebounding in 2009.

Another company on the fringe between discretionary and necessity is Town Sports International (Nasdaq: CLUB), which owns and operates fitness clubs in New York, Boston, Washington D.C. and Philadelphia. The shares had declined steeply in recent months under the rationale that in an economic downturn, gym memberships might be among the first expenditures to be cut by consumers looking to save money.

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SOURCE: Zacks.com

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