Sport Chalet said that macro economic trends – most likely spurred by California’s slumping housing market – are impacting sales during the fiscal second quarter. This factor coupled with the company’s aggressive growth plans and market share turf war with other sporting goods retailers, is impacting profitability as well. California, which is Sport Chalet’s home market, experienced a 23% decline in housing prices last month. This decline has contributed to an economic slow-down in the area.

Fiscal second quarter sales are expected to be in the range of $97 million to $98 million, up from $91.3 million in the second quarter of last year. Comparable store sales for the second quarter are expected to decline in the range of 2% to 3%. Earnings per share are expected to range from break even up to two cents. Last year, the company reported EPS of 12 cents. Management expects full fiscal year net sales will increase moderately over fiscal 2007, while comparable store sales are expected to be flat to slightly below the prior fiscal year. Net income is expected to be slightly lower than last year as sales growth from new stores is offset by their costs, due to new stores taking time to reach operating efficiency.