Sport Chalet Swings to Q1 Profit on 6.1% Comp Gain; Acquires Bassco SG

Sport Chalet, Inc. announced that sales for its first quarter ended June 30, 2004 increased 15.4% to $61.5 million , from $53.3 million for the quarter ended June 30, 2003. The increase is the result of opening three new stores in late Fall 2003, as well as a same store sales increase of 6.1%.

Gross profit margin increased from 27.7% for the quarter ended June 30, 2003 to 28.8% for the same quarter this year, due to reduced costs from more efficient inbound logistics as well as continued improvements in inventory procurement. Selling, general and administrative expenses, as a percentage of sales, decreased primarily due to the increase in same store sales, as well as labor savings and lower advertising expenses, partially offset by an increase in workers' compensation expense.

SPCH posted net income of $245,000, or three cents per diluted share, for the quarter, versus a loss of $593,000, or nine cents per diluted share, in the first quarter last year.

Commenting on the results, Craig Levra, Chairman and CEO said, “We are pleased to begin the fiscal year with a strong first quarter and a significant improvement over last year. We again managed inventory effectively while achieving a same store sales increase of 6.1%, increasing our gross profit margin 110 basis points and reducing our average inventory per store by 2.1%.” Mr. Levra concluded, “During July, we helped solidify our team sales business and strengthened our operating platform by acquiring Bassco Sporting Goods, a Southern California based team dealer with nearly 20 years of team sales expertise.”

                            SPORT CHALET, INC.

             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)

                                                  Three months ended
                                                        June 30,
                                                2004              2003

   Net sales                                $61,538,119        $53,309,276
   Cost of goods sold, buying and
    occupancy                                43,839,441         38,536,263
   Gross profit                              17,698,678         14,773,013
   Selling, general and administrative
        expenses                             17,236,355         15,721,469

   Income (loss) from operations                462,323           (948,456)
   Interest expense                             (43,291)           (34,010)
   Income (loss) before taxes                   419,032           (982,466)
   Income tax provision (benefit)               174,000           (389,000)

   Net income (loss)                           $245,032          $(593,466)

   Earnings (loss) per share:
               Basic                              $0.04             $(0.09)
               Diluted                            $0.03             $(0.09)