LOS ANGELES (press release) --Sport Chalet, Inc. announced the results of its second quarterended September 30, 2002. Sales have increased from $54.7 million for thethree months ended September 30, 2001 to $56.3 million for the same periodthis year, a 3.0% increase. The increase is the result of opening two newstores in November 2001, partially offset by a comparable store sales decreaseof 2.3%. Comparable store sales have decreased as discretionary spendingremains tightly managed by consumers in reaction to the prolonged economic slowdown. Net income increased from $1.3 million, or $0.19 per diluted share,for the three months ended September 30, 2001 to $1.4 million, or $0.20 perdiluted share, for the same period this year, primarily as a result ofincreased sales and enhanced inventory management.
During the six months ended September 30, 2002, sales increased from$102.6 million for the same period last year to $107.5 million, a4.8% increase. The increase is the result of opening one store in the periodlast year and two new stores in November 2001, partially offset by acomparable store sales decrease of 1.4%. Net income decreased from$2.6 million, or $0.37 per diluted share, for the six months endedSeptember 30, 2001 to $1.5 million, or $0.22 per diluted share, for the sameperiod this year, primarily as a result of decreased gross profit. Occupancycosts included in gross profit increased as a percent of sales due to thedecline in comparable store sales and the new larger distribution center. Inaddition gross profit has been impacted by consumer purchasing that hastrended towards value merchandise, although more recently this tendency hasdiminished. Offsetting these effects to gross profit were lower markdowns, ascompared to the prior year when an aggressive end-of-summer clearancepromotion was not repeated to the same extent this year due to enhancedinventory management.
Commenting on the results, Craig Levra, Chairman and CEO, said, "We arepleased to deliver our second best second quarter in Company history despitethe prolonged soft economic environment, which has slowed consumer demandacross the sector. While we have more work ahead, our emphasis will remain onexecuting our strategic and growth initiatives which will aid our team inimproving our productivity and profitability in the short and long term."
In November, the Company plans to open its second Las Vegas marketlocation in Summerlin, Nevada, and also continues its Southern Californiagrowth with a store opening in Riverside.