Sport Chalet, Inc. saw sales increase 3.7% from $96.1 million for the third quarter ended December 31, 2004 to $99.7 million for the same period this year, with sales from six new stores contributing $5.4 million, or 5.5% of the increase. Same store sales decreased 1.8% for the quarter following last year's record winter weather conditions which increased customer traffic. Excluding winter-related merchandise, same store sales increased 3.0% for the quarter following a 3.4% increase for the same quarter last year. Three new stores were opened in the third quarter of fiscal 2006 compared to three new stores opened in the third quarter of fiscal 2005.

Craig Levra, Chairman and CEO, stated, “We are pleased with our performance for the quarter. We are beginning to see benefits from our overall strategy of being less weather and geography dependent despite a challenging comparison to last year's all-time record quarter. While we experienced a same store sales and earnings decrease, we are encouraged by the 3.0% growth in our core non-winter business on top of last year's 3.4% increase. In addition, our Northern California and Nevada stores continue to improve, setting the stage for future growth. I am also happy with the performance of our team in successfully opening three new stores in Arizona, marking Sport Chalet's entrance into its third state, while finishing the quarter with zero debt.”

Gross profit decreased as a percent of sales from 32.5% for the three months ended December 31, 2004 to 31.9% for the same period this year. The decrease was primarily due to higher rent expenses for new stores opened during the quarter. Selling, general and administrative expenses increased as a percent of sales from 25.9% in the third quarter of fiscal 2005 to 26.5% in the third quarter of fiscal 2006. The increase is related to greater advertising expenses for the holiday season and new store openings.

Net income was $3.7 million, or 26 cents per diluted share, for the three months ended December 31, 2004 compared to $3.0 million, or 22 cents per diluted share, for the same period this year.

“We remain focused on a disciplined expansion of our business as well as in-store systems and customer initiatives aimed at strengthening the Company. Our 10% sales growth and 12% earnings increase year-to-date, excluding the effects of the recapitalization, are a reflection of the hard work and dedication of our employees, our unique store concept and our ability to meet the needs of our customers.”

Nine Month Results

Sales increased 10.1% from $230.3 million for the nine months ended December 31, 2004 to $253.5 million for the same period this year, with sales from eight new stores contributing $20.1 million, or 8.1% of the increase. Same store sales increased 1.3% for the nine-month period. Three new stores were opened in the first nine months of fiscal 2006 compared to five new stores opened in the first nine months of fiscal 2005.

Gross profit increased as a percent of sales from 31.0% for the nine months ended December 31, 2004 to 31.2% for the same period this year. SG&A as a percent of sales for the nine-month period was 30.5%, including $8.7 million related to the recapitalization which occurred in the second quarter of fiscal 2006. This compares to 26.9% for the nine months ended December 31, 2004. Excluding the effect of the recapitalization, SG&A as a percent of sales was 27.1% in the nine months ended December 31, 2005.

Net loss for the nine months ended December 31, 2005 was $1.7 million, or 13 cents per diluted share, which includes the after-tax charge of $7.8 million, or 55 cents per diluted share, related to the recapitalization. Excluding the effect of the recapitalization, net income increased from $5.4 million, or 38 cents per diluted share, for the nine months ended December 31, 2004 to $6.1 million, or 44 cents per diluted share, for the same period this year.

New Store Openings

During the third quarter ended December 31, 2005, Sport Chalet expanded into its third state with the opening of three stores in Arizona. In addition, the Company opened its 40th store in the Foothill Ranch Town Center in South Orange County, California last week and expects to open a new store in Thousand Oaks, California this spring. The Company continues to anticipate additional store expansion, with four to eight stores planned for fiscal 2007, assuming timely construction by prospective landlords.

Management Promotions

The Company also announced today that it has made the following management promotions in recognition of each manager's hard work and recent achievements in their departments:


    *  Steve Belardi has been promoted to Vice President - Logistics.  Mr.
       Belardi joined Sport Chalet in 2001 as Director of Warehouse Operations
       and Logistics.  Mr. Belardi was instrumental in the Company's
       distribution facility upgrade in 2002 and has led efforts to
       significantly reduce the Company's expenses related to logistics.  His
       responsibilities remain as analysis of freight processes and overseeing
       warehouse operations.

    *  Jason Gautereaux has been promoted to Vice President - Inventory
       Management.  Mr. Gautereaux joined Sport Chalet in 1990 as a store
       sales associate and has since held positions in buying, SCUBA
       operations, store and inventory management, most recently serving as
       Director of Inventory Management.  He played a key role in the
       implementation of the Company's first inventory replenishment system in
       2001.  His responsibilities include overseeing all aspects of inventory
       management including merchandise planning, allocation and
       replenishment.

    *  Ted Jackson has been promoted to Vice President - Information
       Technology and Chief Information Officer.  Mr. Jackson served as
       Director of Information Systems since joining the Company in 1999 and
       has been responsible for significant upgrades to the Company's
       infrastructure platforms.  His current responsibilities, which will not
       change from his previous position, include overseeing the areas of
       systems planning, support services and security, as well as facilities
       and system implementation.

    *  Linda Obermeyer has been promoted to Vice President - Merchandising
       from Divisional Merchandise Manager of Footwear and Apparel.  Ms.
       Obermeyer joined Sport Chalet in 1998 as a senior buyer in apparel.  In
       her new role, she will be responsible for the planning and directing of
       buying activities of all merchandise categories as well as working
       closely with key vendors to achieve the Company's desired objectives.

Craig Levra, Chairman and CEO, stated, “Sport Chalet has achieved many milestones over the last year, including entering its third state with the opening of three stores, generating new record sales levels and completing our recapitalization. This was in no small part due to the dedication and strength of our employees. Each of the promoted managers has played a key role in the recent expansion of our Company and we are pleased to recognize these achievements with their promotions. We are grateful for their contributions to date and believe that our Company will continue to build on our success under their guidance.”