Sport Chalet, Inc. turned in another solid quarterly performance for the fiscal second period ended September 30, but saw its recapitalization efforts in the quarter wipe out otherwise stellar results. The five new stores opened since fiscal Q2 last year added about $6.9 million in revenues for the period and that 10.7% increase, coupled with a 2.7% comp store sales gain for the period, helped push revenues up 12.7% for the quarter.

Excluding costs associated with the company’s recapitalization efforts, net income would have increased 63.7% to $2.6 million, or 19 cents per diluted share, in the fiscal second quarter, compared to net income of $1.6 million, or 11 cents per diluted share, for the year-ago period.

The retailer opened two new stores during the quarter and expects to open three stores in Arizona and one in Southern California before the end of the fiscal year. They are on track to open four to eight more stores in fiscal 2007. Management said they will finish the current fiscal year with 55% of the stores either new or remodeled.

Comparisons for the balance of the year are expected to be challenging since the retailer is up against an early winter season last year that drove sales gains through spring. They already need to play catch up to last year’s strong performance in the winter-related categories.

>>> The retailer held its first conference call with analysts in an effort to get more interest in the company’s prospects…

Sport Chalet, Inc. 
Fiscal Second Quarter Results
(in $ millions) 2005 2004 Change
Total Sales $81.7 $72.5 +12.7%
Gross Margin 31.8% 30.7% +100 bps
Net Income ($5.2) $1.6  vs. gain
Diluted EPS (38¢) 11¢  vs. gain
Comp Sales  +2.7% +5.2%  
Inventories* $78.7 $76.6 +2.7%

*At quarter-end