Sport Chalet, Inc. announced sales increased 12.7% to $81.7 million for the third quarter ended September 30, 2005 from $72.5 million for the same period last year, with sales from five new stores contributing $6.9 million, or 10.7% of the increase. Same store sales increased 2.7% for the quarter. Two new stores were opened in the second quarter of fiscal 2005 and three new stores were opened in the third quarter of fiscal 2005.

Craig Levra, chairman and CEO, stated, “We are encouraged by our results in the second quarter of fiscal 2006 in which we generated strong top and bottom line increases, excluding the impact of the recapitalization. The Company's recapitalization that was approved in September enables us to sustain our strong culture and core values as we continue to grow the business and also provides us with increased financial flexibility in the future. I am proud of the entire Sport Chalet team for maintaining the positive momentum we generated in the last year.”

Gross profit increased as a percent of sales from 30.7% for the three months ended September 30, 2004 to 31.8% for the same period this year. The increase was primarily due to better inventory assortments as well as an improvement in inventory shrinkage. Selling, general and administrative expenses as a percent of sales increased to 36.9% for the second quarter of fiscal 2006. The increase is related to the recapitalization approved by the Company's stockholders which included the transfer of stock from the Company's founder to certain members of management and which resulted in a charge of approximately $8.6 million. Excluding the effect of the recapitalization, SG&A as a percent of sales decreased from 27.0% for the three months ended September 30, 2004 to 26.4% for the same period this year. The improvement reflects new store opening expenses not incurred this year as compared to additional labor and advertising expenses associated with new store openings in 2004.

Net loss for the second quarter was $5.2 million, or 38 cents per diluted share, which includes an 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 63.7% from $1.6 million, or 11 cents per diluted share, for the three months ended September 30, 2004 to $2.6 million, or 19 cents per diluted share, for the same period this year.

The recapitalization completed during the second quarter of fiscal 2005 doubled the company's total number of shares outstanding. Therefore, the recapitalization had the same effect on earnings per share as a 2-for-1 stock split. The company has presented below a summary of quarterly earnings per share results for fiscal 2005 as adjusted to reflect the recapitalization discussed above for the Class A and Class B Common Stock:




                                        Three months ended,
    Class A and Class B  June 30,   September 30,  December 31,   March 31,
                           2004          2004         2004           2005
    Earnings per share:
     Basic                $0.01         $0.12         $0.28         $0.06
     Diluted               0.01         $0.11         $0.26         $0.05

Six Month Results
For the six months ended September 30, 2005 sales increased 14.7% from $134.1 million for the six months ended September 30, 2004 to $153.9 million. Sales from five new stores contributed $14.3 million, or 10.6% of the total sales growth. Same store sales increased 3.7% for the six-month period. Two new stores were opened in the second quarter of fiscal 2005 and three new stores were opened in the third quarter of fiscal 2005.

Gross profit increased as a percent of sales from 29.9% for the six months ended September 30, 2004 to 30.7% for the same period this year primarily due to better inventory management. SG&A as a percent of sales increased to 33.0% primarily due to the recapitalization. Excluding the effect of the recapitalization SG&A as a percent of sales decreased from 27.6% for the six months ended September 30, 2004 to 27.4% for the same period this year.

Net loss for the six months ended September 30, 2004 was $4.8 million, or 36 cents per diluted share, which includes the aforementioned after-tax charge of $7.8 million, or 56 cents per diluted share, related to the recapitalization. Excluding the effect of the recapitalization, net income increased 77.1% from $1.7 million, or 12 cents per diluted share, for the six months ended September 30, 2004 to $3.1 million, or 22 cents per diluted share, for the same period this year.

New Store Openings

As the company announced separately today, this month Sport Chalet will expand into its third state with the opening of three stores in Arizona. In addition, one additional Southern California store is expected to open in fiscal 2006. The company also anticipates additional store expansion to continue, with four to eight stores planned for fiscal 2007, assuming timely construction by prospective landlords.

Craig Levra, Chairman and CEO, concluded, “Going forward, we continue to make progress on various initiatives that will further strengthen and expand our business. We remain committed to efficiently executing our growth plans and are on track to open three new stores in Arizona this month. We produced solid results in the first half of the year and we are confident that our proven business model and strategic initiatives will drive long-term shareholder value.”

                              SPORT CHALET, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                 (UNAUDITED)

                            Three months ended          Six months ended
                              September 30,              September 30,
                            2005         2004          2005          2004

    Net sales            $81,732,263  $72,525,181  $153,876,658  $134,146,300
    Cost of goods sold,
     buying and
      occupancy costs     55,774,032   50,228,083   106,614,791    94,080,872
    Gross profit          25,958,231   22,297,098    47,261,867    40,065,428

    Selling, general and
     administrative
      expenses            30,199,069   19,590,388    50,847,474    37,076,733
    Income (loss) from
     operations           (4,240,838)   2,706,710    (3,585,607)    2,988,695

    Interest expense         (13,149)     (47,616)      (15,036)      (90,907)
    Income (loss) before
     taxes                (4,253,987)   2,659,094    (3,600,643)    2,897,788

    Income tax provision     909,418    1,065,252     1,173,418     1,167,117
    Net income (loss)    $(5,163,405)  $1,593,842   $(4,774,061)   $1,730,671

    Class A and Class B
     earnings (loss)
      per share:
             Basic           $(0.38)       $0.12        $(0.36)        $0.13
             Diluted         $(0.38)       $0.11        $(0.36)        $0.12