<PAGE>
 
                                   FORM 10-Q
                                  
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

(Mark One)
 
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securitie Exchange
    Act for 1934
 
For the quarterly period ended June 30,1997
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act for 1934
 
For the Transition period from ______ to ______
Commission file number: 0-20736
                        -------

                           Sport Chalet, Inc.
--------------------------------------------------------------------------------
          (Exact name of registrant as specified in its charter)

            Delaware                                  95-4390071
--------------------------------------------------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
  incorporation or organization)

    920 Foothill Boulevard,  La Canada             California  91011
--------------------------------------------------------------------------------
  (Address of principal executive offices)               (Zip)

                                (818) 790-2717
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
   (Former name former address and former fiscal year, if changes since last
   report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

     Yes  X                                                      No    
         ---                                                        ---   

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date, August 1, 1997:

                                   6,500,000

                                       1
<PAGE>
 
                              SPORT CHALET, INC.
                              ------------------

                              Index to Form 10-Q

                                    Part I
                                    ------

1   Item 1.    Condensed Financial Statements

2.  Item 2.    Management's Discussion and Analysis of Financial Condition and
               the Results of Operations


                                    Part II
                                    -------

1.  Item 4.    Submission of Matters to a Vote of Security Holders

2.  Item 6.    Exhibits and Reports on Form 8-K

                                       2
<PAGE>
 
                              SPORT CHALET, INC.
                              ------------------
                                        
                              
                                    PART I
                                    ------

                                        
     ITEM 1.   CONDENSED FINANCIAL STATEMENTS.
               -------------------------------

     The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Commission.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair statement of
results for the interim period have been made.

     It is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included in the
Company's 1997 Annual Report to Shareholders filed with the Commission on June
30, 1997.

                                       3
<PAGE>
 
                              SPORT CHALET, INC.

                        CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Three months ended June 30,
                                             ----------------------------------
                                                 1997                   1996
                                             --------------        ------------
<S>                                          <C>                   <C>
Net sales............................        $29,219,115           $29,250,426
Cost of goods sold...................         18,548,837            18,450,823
                                             -----------           -----------
Gross profit.........................         10,670,278            10,799,603
Selling, general and administrative
 expenses............................         10,172,046            10,362,989
                                             -----------           -----------
Income from operations...............            498,232               436,614
Interest expense.....................             75,506               282,292
                                             -----------           -----------
Income before taxes..................            422,726               154,322
Income tax provision.................            177,000                63,000
                                             -----------           -----------
Net income...........................            245,726                91,322
                                             ===========           ===========
 Earnings per share..................               $.04                  $.01
                                             ===========           ===========
Weighted average number
 of common shares outstanding........          6,500,000             6,500,000  
                                             ===========           ===========
</TABLE>


                            See accompanying note.

                                       4
<PAGE>
 
                              SPORT CHALET, INC.

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     
                                                  June 30,         March 31,   
                                                   1997              1997
                                                ------------     -----------
                                                (Unaudited)
<S>                                             <C>               <C> 
ASSETS
------
Current assets:
 Cash.........................................   $   522,343     $   451,114
 Accounts receivable - net....................       238,849         476,070
 Merchandise inventories......................    30,479,491      28,093,635
 Prepaid expenses and other current assets....       166,323         354,281
 Deferred and refundable income taxes.........     1,233,627       1,394,307
                                                 -----------     -----------
     Total current assets.....................    32,640,633      30,769,407
 Furniture, equipment and leasehold                          
  improvements - net..........................    12,889,650      13,301,334
 Deferred income taxes........................        34,508         298,879
 Deposits.....................................        66,730          66,730
                                                 -----------     -----------
     Total assets.............................   $45,631,521     $44,436,350
                                                 ===========     ===========
                                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                         
------------------------------------                         
Current liabilities:                                         
 Loans payable to bank........................   $ 2,919,651     $ 1,351,765
 Accounts payable.............................    10,868,746      10,586,661
 Salaries and wages payable...................     1,538,607       2,200,895
 Other accrued expenses.......................     3,351,844       3,266,082
 Income tax payable...........................                       324,000
                                                 -----------     ----------- 
     Total current liabilities................    18,678,848      17,729,403
                                                             
Shareholders' equity                                         
 Preferred stock, $.01 par value:                            
   Authorized shares - 2,000,000                             
   Issued and outstanding shares - none                      
 Common stock, $.01 par value:                               
   Authorized shares - 15,000,000                            
   Issued and outstanding shares - 6,500,000..        65,000          65,000
   Additional paid-in capital.................    19,900,052      19,900,052
 Retained earnings............................     6,987,621       6,741,895
                                                 -----------     -----------
 Total shareholders' equity...................    26,952,673      26,706,947
                                                 -----------     -----------
Total liabilities and shareholders' equity       $45,631,521     $44,436,350
                                                 ===========     ===========
</TABLE>                                                      

                             SEE ACCOMPANYING NOTE.

                                       5
<PAGE>
 
                              SPORT CHALET, INC.

                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                     Three months ended June 30,
                                                   -----------------------------
                                                        1997           1996
                                                   --------------  -----------
<S>                                                <C>             <C>
OPERATING ACTIVITIES
Net income.................................        $   245,726     $     91,322
Adjustments to reconcile net income to                          
  net cash provided by (used in)                                
  operating activities:                                         
    Depreciation and amortization..........            679,500          840,000
    Deferred income taxes..................            414,271          154,095
    Changes in operating assets and                             
     liabilities:                                               
      Accounts receivable..................            237,221          245,566
      Merchandise inventories..............         (2,385,856)        (951,330)
      Prepaid expenses and other current                        
       assets..............................            187,958          255,414
      Refundable income tax................             10,780    
      Note receivable                                                   212,710
      Accounts payable.....................            282,085          926,162
      Salaries and wages expenses..........           (662,288)        (185,759)
      Other accrued expenses...............             85,762          (49,101)
      Income tax payable...................           (324,000)
                                                  ------------     ------------
Net cash (used in) provided by operating                        
 activities................................         (1,228,841)       1,539,079
                                                                
INVESTING ACTIVITIES                                            
Purchase of furniture, equipment and                            
 leasehold improvements....................           (267,816)        (261,998)
                                                  ------------     ------------
Net cash used in investing activities......           (267,816)        (261,998)
                                                                
FINANCING ACTIVITIES                                            
Proceeds from bank borrowings..............         22,676,252       16,496,215
Principal payments on bank loans...........        (21,108,366)     (17,799,752)
                                                  ------------     ------------
Net cash provided by (used in) financing                        
 activities................................          1,567,886       (1,303,537)
Increase (decrease) in cash................             71,229          (26,456)
Cash at beginning of period................            451,114          768,562
                                                  ------------     ------------
Cash at end of period......................       $    522,343     $    742,106
                                                  ============     =============

Cash paid (refunded) during the year for:                       
    Income taxes...........................       $     75,842     $    (91,094)
    Interest...............................             75,506          349,081
                                                                 
</TABLE>

                            SEE ACCOMPANYING NOTE.

                                       6
<PAGE>
 
                              SPORT CHALET, INC.

                         NOTE TO FINANCIAL STATEMENTS
                                  (UNAUDITED)
                                        

1.  For a summary of significant accounting policies and other information which
    relates to these interim statements, reference should be made to the notes
    to financial statements included in the Company's 1997 Annual Report to
    Shareholders.

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND THE
         -------------------------------------------------------------------
         RESULTS OF OPERATIONS.
         ----------------------

         The following should be read in conjunction with the Company's
financial statements and related note thereto provided under Item 1 above.

         THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE
30, 1996. Sales were essentially flat, $29.2 million compared to $29.3 million
for the same quarter last year. Lackluster sales were attributable to reduced
sales of in-line skates and excercise equipment.

         Gross profit as a percent of sales decreased slightly, 36.5% compared
to 36.9% for the same period last year, as a result of increased markdowns,
partially offset by a decrease in the accrual for estimated inventory shrinkage.
The increased markdowns reflect clearance activity of slow moving inventory as
well as greater markdowns on promotional events compared to the same quarter
last year.

         Selling, general and administrative expenses as a percent of sales
decreased from 35.4% to 34.8%, which management believes reflects continued
savings from cost reduction programs.

         Interest expense decreased from $282,000 to $76,000 due to a
significant decrease in average debt outstanding. The decrease in average debt
outstanding is primarily due to reductions in inventory levels as a result of
improved systems and controls.

         The effective income tax rate was 41.9% compared to 40.8% for the same
period last year. These rates differ from the statutory rate of 40.1% as a
result of permanent differences between financial reporting and tax-basis
income.

         Net income increased from $91,000 or $.01 per share to $246,000 or $.04
per share, primarily as a result of reduced expenses. This is the Company's
fifth consequtive profitable quarter.

         The Company's business is highly seasonal in nature and historically
its highest sales level and operating profitability generally occur during the
winter months of November, December and January, which overlap the third and
fourth fiscal quarters, and management therefore believes that the operating
results for the first quarter may not necessarily be indicative of the Company's
overall operating results for the fiscal year.

                                       8
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary capital requirements are for inventory and store
remodeling. Historically, the Company's liquidity needs have been met by cash
from operations, credit terms from vendors and bank borrowings.

     Net cash used in operating activities is $1.2 million for the three months
ended June 30, 1997 compared to cash provided of $1.5 million for the same
period ended June 30, 1996. Net income provided $246,000 and $91,000 for the
three months ended June 30, 1997 and 1996, respectively. Depreciation also
provided $680,000 and $840,000 of cash for same periods ended June 30, 1997 and
1996, respectively.

     Inventories increased by $2.4 million and $951,000 for the three months
ended June 30, 1997 and 1996, respectively, due to the seasonal build-up of
summer inventory. The 1997 increase is more than the 1996 increase because of
relatively lower inventory levels at the beginning of this fiscal year when
compared to the previous year. The inventory at June 30, 1997 is $3.5 million
less than at June 30, 1996.

     Net cash used in investing activities was $268,000 and $262,000 for the
quarters ended June 30, 1997 and 1996, respectively, primarily for the routine
replacement of furniture, equipment and leasehold improvements at existing
stores.

     Net cash used in or provided by financing activities has primarily
reflected advances or pay down of the Company's revolving credit line. Cash
provided is $1.6 million for the three months ended June 30, 1997 compared to
$1.3 million used by financing activities for the three months ended June 30,
1996. The increase in net advances during the 1997 quarter compared to the 1996
quarter is due to the relatively low level of borrowing at the beginning of this
fiscal year when compared to the previous year. The loan payable to bank is $6.1
million less than at June 30, 1996.

DISCLOUSURE REGARDING FORWARD-LOOKING STATEMENTS

     The statements which are not historical facts contained in this Quarterly
Report on Form 10-Q are "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties. The words "anticipate", "believes", "expect", "intend", "may", or
similar expressions used in this Quarterly Report as they relate to the Company
or its Management are generally intended to identify such forward looking
statements. These risks and uncertainties contained in this Quarterly Report
include but are not limited to, product demand and market acceptance risks, the
effect of economic conditions generally and in Southern California, and retail
and sporting goods business conditions specifically, the impact of competition,
technological difficulties, capacity and supply constraints or difficulties, the
results of financing efforts, changes in consumer preferences and trends, the
effect of the Company's accounting policies, weather conditions, acts of God,
and other risks detailed in the Company's Security and Exchange Commission
filings.

                                       9
<PAGE>
 
                                    PART II
                                        
     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
              ----------------------------------------------------

     At the annual meeting of shareholders on August 7, 1997, the Class 2
Director, John R. Attwood, was re-elected to the Company's Board of Directors.
There were (6,426,942) votes for and (35,111) votes withheld for John R.
Attwood. The Company's Class 1 Director, Eric S. Oberz, and Class 3 Directors,
Norbert J. Olberz and Kenneth Olsen, continue to serve on the Board. The terms
of the Class 1, 2 and 3 Directors presently expire in fiscal year 2000, 2001 and
1999, respectively.


     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
              ---------------------------------

              (a)  Exhibits

                   27.1  Financial Data Schedule

              (b)  Reports on Form 8-K.

                   During the quarter for which this report on Form 10-Q is
filed, no reports on Form 8-K were filed.

                                       10
<PAGE>
 
                                   SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized officer and principal financial officer.


                                       SPORT CHALET, INC.



DATE:    August 8, 1997                /S/ Norbert J. Oberz
                                       ----------------------------------------
                                       Norbert J. Olberz
                                       Chairman of the Board, Interim President
                                       and Chief Executive Officer
                                       (Duly Authorized Officer)



DATE:    August 8, 1997                /S/ Howard K. Kaminsky 
                                       ----------------------------------------
                                       Howard K. Kaminsky
                                       Senior Vice President-Finance, Chief
                                       Financial Officer, and Secretary

                                       11