Sport Chalet, Inc. reported that sales for its first quarter ended June 30, 2003 increased 4.1% to 53.3 million, compared to $51.2 million in the yeara-go period. The increase is the result of opening two new stores in late November 2002, offset in part by a same store sales decrease of 2.1%.

The same store decrease resulted primarily from unseasonably cold weather throughout the quarter which impacted sales of spring and summer related merchandise.

The gross profit margin increased to 27.7%, compared to 26.9% in the first quarter of last year, as a result of the Company's continued focus on inventory management.

Selling, general and administrative expenses, as a percentage of sales, increased primarily due to the decline in same store sales, higher advertising expense attributable to the timing of vendor reimbursements, the write-off of the remaining fixed assets as a result of two large-scale remodels, and additional labor costs relating to the installation of new warehouse management software.

As a result, net income decreased from $84,000, or $0.01 per diluted share, in the first quarter last year to a loss of $593,000, or $0.09 per diluted share.

Commenting on the results, Craig Levra, Chairman and CEO said, “This quarter's results mark the first loss in the Company's last 29 quarters. While we are disappointed with this quarter's outcome, few retailers have matched our long-term success in this challenging retail environment, lackluster economic recovery and diverted national attention. In the quarter we achieved noteworthy advances in objectives relating to improved merchandise procurement, inventory management and our balance sheet position. In addition we completed large-scale remodels of two mature stores and have made significant advances on our Northern California expansion.” Mr. Levra concluded, “Regardless of near term challenges, we are confident in our business model's ability to be adaptable and diverse, and we expect to advance on key strategic fronts that will permit us to deliver increased sales and profitability to our shareholders when the economy improves.”

CONDENSED STATEMENTS OF INCOME

                                                      Three months ended
                                                            June 30,
                                                       2003         2002

    Net sales                                      $53,309,276  $51,204,660
    Cost of goods sold, buying and occupancy        38,536,263   37,423,341
    Gross profit                                    14,773,013   13,781,319
    Selling, general and administrative expenses    15,721,469   13,599,489

    Income (loss) from operations                     (948,456)     181,830
    Interest expense                                   (34,010)     (39,942)
    Income (loss) before taxes                        (982,466)     141,888
    Income tax (benefit) provision                    (389,000)      58,000

    Net (loss) income                                $(593,466)     $83,888

    Earnings (loss) per share:
       Basic                                            $(0.09)       $0.01
       Diluted                                          $(0.09)       $0.01