Sport Chalet Posts Fiscal Q1 Loss on 1.3% Comps Increase

Sport Chalet, Inc. sales increased $7.1 million, or 8.5%, to $91.6 million for the first quarter of fiscal 2008 from $84.4 million for the same period last year, which benefited by $2.1 million in sales from two additional days as a result of the Company's calendar change last year. Sales from seven new stores opened in the last year contributed $7.9 million in sales on a same day basis and same store sales increased 1.3% compared to the first quarter of fiscal 2007. Net loss for the first quarter was $664,000, or $0.05 per diluted
share, compared to net income of $530,000, $0.04 per diluted share, for
the same period of fiscal 2007.

Gross profit as a percent of sales decreased 70 basis points to 28.6% from 29.3% in the first quarter of last year. The decrease primarily reflects increased rent related to new stores and increases in reserves for seasonal merchandise carryover, partially offset by continued improvements in merchandise sourcing. Selling, general and administrative expenses as a percent of sales increased 120 basis points to 29.4% from 28.2% last year primarily due to new stores which take time to reach operating efficiency.

Craig Levra, Chairman and CEO, stated, “Our financial results this quarter reflect a more challenging sales environment given current economic concerns as well as the ramp up of our new stores. Despite softer than anticipated sales, we made important operational progress in line with our long-term growth strategy and continued to focus on execution at the store level. We were pleased with the performance of our hardlines merchandise categories including mountain shop, fishing and water sports. We effectively managed our inventory during the quarter and are comfortable with our current levels. We also continued to move forward with our IT initiatives, including our installation of a new merchandising and financial system from SAP. Finally, we successfully opened two new stores which are performing well. Our expansion program remains on schedule with an additional five store openings planned for this fiscal year, including our newest store opening this week in Tempe, Arizona.

“Sport Chalet remains committed to offering premium, high-quality merchandise and services. In conjunction with our ongoing dedication to providing superior customer service, we will also continue to focus on our strategic initiatives, which will be critical in driving improved performance in the coming quarters.”

                              SPORT CHALET, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)


                                                     Three months ended
                                              July 1, 2007      July 2, 2006

    Net sales                                  $91,553,910       $84,418,339
    Cost of goods sold, buying and
          occupancy costs                       65,401,225        59,669,496
    Gross profit                                26,152,685        24,748,843

    Selling, general and administrative
          expenses                              26,908,688        23,828,887
    (Loss) income from operations                 (756,003)          919,956

    Interest expense                               359,017            38,520
    (Loss) Income before taxes                  (1,115,020)          881,436

    Income tax (benefit) provision                (450,696)          351,025
    Net (loss) income                            $(664,324)         $530,411

    (Loss) earnings per share:
                 Basic                              $(0.05)            $0.04
                 Diluted                            $(0.05)            $0.04

    Weighted average number of
            common shares outstanding:
                 Basic                          14,016,224        13,773,398
                 Diluted                        14,016,224        14,191,130