<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 Securities Exchange
     Act for 1934

For the quarterly period ended June 30, 1999
[_]  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, 1999:

                                   6,577,000
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                              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 5.   Other Information

3.   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 1999 Annual Report to Shareholders filed with the Commission on June
29, 1999.

                                       3
<PAGE>

                               SPORT CHALET, INC.

                         CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               Three months ended June 30,
                                                                  --------------------------------------------------
                                                                            1999                         1998
                                                                  ---------------------        ---------------------
<S>                                                                <C>                          <C>
Net sales..........................................                         $34,668,627                  $32,097,240
Cost of goods sold, buying and occupancy...........                          24,216,001                   22,578,772
                                                                            -----------                  -----------
Gross profit.......................................                          10,452,626                    9,518,468
Selling, general and administrative
       expenses                                                               9,442,672                    8,580,405
                                                                            -----------                  -----------
Income from operations.............................                           1,009,954                      938,063
Interest income....................................                              84,522                       26,654
                                                                            -----------                  -----------
Income before taxes................................                           1,094,476                      964,717
Income tax provision...............................                             436,000                      394,000
                                                                            -----------                  -----------

Net income.........................................                         $   658,476                  $   570,717
                                                                            ===========                  ===========

Earnings per share:
             Basic.................................                         $       .10                  $       .09
                                                                            ===========                  ===========
             Diluted...............................                         $       .10                  $       .09
                                                                            ===========                  ===========

Weighted average number of common
       shares outstanding:
             Basic.................................                           6,577,000                    6,525,000
                                                                            ===========                  ===========
             Diluted...............................                           6,797,000                    6,676,000
                                                                            ===========                  ===========
</TABLE>

                             See accompanying note.

                                       4
<PAGE>

                               SPORT CHALET, INC.

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   June 30,                   March 31,
                                                                                     1999                       1999
                                                                           --------------------        --------------------
                                                                                 (Unaudited)
<S>                                                                           <C>                         <C>
ASSETS
------
Current assets:
   Cash........................................................                     $ 4,899,903                 $10,829,102
   Accounts receivable - net...................................                         605,837                     604,296
   Merchandise inventories.....................................                      36,148,790                  29,518,546
   Prepaid expenses and other current assets...................                         141,737                     268,343
   Deferred income tax.........................................                       1,148,920                   1,263,779
                                                                                    -----------                 -----------
          Total current assets.................................                      42,945,187                  42,484,066
Furniture, equipment and leasehold improvements - net..........                      14,527,937                  13,501,416
Other assets...................................................                         531,721                     581,262
                                                                                    -----------                 -----------
          Total assets.........................................                     $58,004,845                 $56,566,744
                                                                                    ===========                 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
  Accounts payable.............................................                     $14,035,458                 $11,228,511
  Salaries and wages payable...................................                       1,479,605                   2,962,400
  Other accrued expenses.......................................                       4,447,652                   4,491,568
  Income tax payable...........................................                         175,869                     802,943
                                                                                    -----------                 -----------
          Total current liabilities............................                      20,138,584                  19,485,422
Deferred income taxes..........................................                          99,353                     101,140

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 - 6,577,000 at
          June 30, 1999 and 6,532,000 at
          March 31, 1999.......................................                          65,770                      65,320
       Additional paid-in capital..............................                      21,659,907                  21,532,107
Retained earnings..............................................                      16,041,231                  15,382,755
                                                                                    -----------                 -----------
Total shareholders' equity.....................................                      37,766,908                  36,980,182
                                                                                    -----------                 -----------
          Total liabilities and shareholders' equity...........                     $58,004,845                 $56,566,744
                                                                                    ===========                 ===========
</TABLE>

                             See accompanying note.

                                       5
<PAGE>

                               SPORT CHALET, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                          Three months ended June 30,
                                                                             -------------------------------------------------
                                                                                       1999                         1998
                                                                             -------------------        ----------------------
<S>                                                                             <C>                        <C>
Operating activities
Net income............................................................               $   658,476                   $   570,717
Adjustments to reconcile net income to net cash provided
     by (used in) operating activities:
         Depreciation and amortization................................                   859,000                       777,000
         Stock Compensation...........................................                   128,250
         Deferred income taxes........................................                   113,072                       394,000
         Changes in operating assets and liabilities:
            Accounts receivable.......................................                    (1,541)                      247,060
            Merchandise inventories...................................                (6,630,244)                   (2,804,911)
            Prepaid expenses and other current assets.................                   126,606                        58,823
            Accounts payable..........................................                 2,806,947                     1,261,522
            Salaries and wages payable................................                (1,482,795)                   (1,162,565)
            Other accrued expenses....................................                   (43,916)                      727,703
            Income tax payable........................................                  (627,074)                            -
                                                                                     -----------                   -----------
Net cash provided by (used in) operating activities...................                (4,093,219)                       69,349

Investing activities
Other assets..........................................................                    49,541                      (644,129)
Purchase of furniture, equipment and leasehold improvements...........                (1,885,521)                   (1,299,282)
                                                                                     -----------                   -----------
Net cash used in investing activities.................................                (1,835,980)                   (1,943,411)

Decrease in cash......................................................                (5,929,199)                   (1,874,062)
Cash at beginning of period...........................................                10,829,102                     4,970,335
                                                                                     -----------                   -----------
Cash at end of period.................................................               $ 4,899,903                   $ 3,096,273
                                                                                     ===========                   ===========

    Cash paid during the period for:
    Income taxes......................................................               $   950,000                   $         -
    Interest..........................................................                         -                             -
</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 1999 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, 1999 Compared to Three Months Ended June 30,
1998.  Sales increased 8.0%, $32.1 million to $34.7 million for the same quarter
last year in part due to the opening of one new store in Long Beach during June
1999.  However, comparable store sales are also up 2.5% despite the absence of
"El Nino" weather conditions that favorably impacted the first quarter of last
year's sales.

     Gross profit as a percent of sales increased to 30.2% compared to 29.7% for
the same period last year, reflecting continued strong consumer demand and
improvements to inventory procurement practices.

     Selling, general and administrative expenses as a percent of sales
increased from 26.7% to 27.2% primarily due to new store pre-opening costs as
well as increased advertising expenses.

     Interest income increased to $85,000 from $27,000 as a result of higher
average cash balances compared to balances during the three months ended June
30, 1998.

     The effective income tax rate is 39.8% compared to 40.8% for the same
period last year, which differs from the statutory rate as a result of permanent
differences between financial reporting and tax-basis income.

     Net income increased from $571,000 or $.09 per diluted share to $658,000 or
$.10 per diluted share due to increased sales and higher gross profit margins.

     The Company's business is seasonal in nature and historically its highest
sales level and operating profitability 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.


Liquidity and Capital Resources

     The Company's primary capital requirements are for inventory and store
expansion, relocation and remodeling.  Historically, cash from operations,
credit terms from vendors and bank borrowing have met the Company's liquidity
needs.  Management believes that these sources will be sufficient to fund
currently anticipated cash requirements for the next 2 to 3 fiscal years.

     Net cash used in operating activities is $4.1 million for the three months
ended June 30, 1999 compared to net cash provided of $69,000 for the same period
ended June 30, 1998.  Net income provided $658,000 and $571,000 for the three
months ended June 30, 1999 and 1998, respectively.  Depreciation also provided
$859,000 and $777,000 of non-cash for the same periods.

                                       8
<PAGE>

     Inventories increased by $6.6 million and $2.8 million for the three months
ended June 30, 1999 and 1998, respectively, due to the seasonal build-up of
summer inventory and the opening of one new store in each quarter ended June 30,
1999 and 1998 and an additional store opening in July 1999.  Accounts payable
increased by $2.8 million and $1.2 million for the related quarters due
primarily to inventory build-up and the timing of payments to vendors.

     Net cash used in investing activities is $1.8 million and $1.9 million for
the quarters ended June 30, 1999 and 1998, respectively, primarily due to the
opening of one new store in each period and one store additional store opened in
July 1999.  For the quarter ended June 30, 1999 other assets provided $49,000 of
cash compared to using $644,000 in the same quarter last year primarily from the
loans made to certain employees pursuant to the March 31, 1998 stock award.

     Net cash provided by financing activities has historically reflected
advances or pay down of the Company's revolving credit line.  There were no
borrowings during either quarter ended June 30, 1999 and 1998.

Year 2000

     The Year 2000 issue exists because many computer applications currently use
two-digit date fields to designate a year.  As the century date occurs, time-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000.  This could result in the computer shutting down or performing
incorrect computations, thereby possibly leading to disruptions in normal
business processing.

     The Company has conducted a review to identify which systems, both internal
and external, will be affected by the "Year 2000" problem, and has developed a
project plan and schedule designed to correct those issues and systems under its
control.

     The majority of the Company's business processing applications operate on a
mainframe computer system.  Management believes that the mainframe hardware and
operating system are now Year 2000 compliant, all programs and data have been
appropriately modified and testing is complete.  The Company's point of sale,
payroll and phone systems also are believed by Management to currently be Year
2000 compliant.

     The Company has completed substantially all of its Year 2000-conversion
project using internal staff spending approximately $200,000 in this effort. The
Company believes that the cost associated with becoming Year 2000 compliant has
not and is not expected to materially affect its future operating results or
financial condition.

     While Management currently believes that it has completed its Year 2000
conversion project, failure to achieve Year 2000 compliance could have a
material adverse impact on the Company's operations.  Management believes the
most reasonably likely worst case scenario is where the Company would be unable
to collect payments from customers through its point-of-sale systems, receive
merchandise from vendors or ship merchandise to its own stores.

     In addition, there can be no assurance that the systems of other companies
with which the Company does business will also be converted in a timely manner
or that failure to convert by other companies would not have a material impact
on the Company's operations. While the

                                       9
<PAGE>

Company did not formally survey its vendors, Management believes that because
the Company purchases merchandise from over 1200 vendors, none of which
historically supplies more than 9% of the Company's annual purchases, and based
on a limited review of vendor disclosure materials, no material disruptions to
the Company's operations due to the Year 2000 issues related to third parties
are anticipated. However, Management believes that the most reasonably likely
worst case scenario regarding third parties would be lost sales due to a
significant number of the Company's vendors having difficulties shipping
merchandise or the Company's inability to accept customer payments because of
problems with the bank or credit card processor. The Company continues to
evaluate the scope of its contingency plans to establish alternate sources for
merchandise and services.


Disclosure 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",
"likely" 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 including Year 2000 issues, 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.

                                       10
<PAGE>

                                    Part II

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

     At the annual meeting of shareholders on August 5, 1999, the one Class 1
Director, Eric S. Olberz, was re-elected to the Company's Board of Directors.
There were 6,236,065 votes for and 28,405 votes withheld.  The Company's Class 3
Directors, Norbert J. Olberz and Kenneth Olsen and Class 2 Directors, John R.
Attwood and Craig L. Levra, continue to serve on the Board.  The terms of the
Class 1, 2 and 3 Directors presently expire in fiscal year 2003, 2001 and 2002,
respectively.

     Item 5.   Other Information.
               ------------------

     On August 5, 1999 the Board of Directors elected Craig Levra as Chief
Executive Officer of the registrant.  Mr. Levra will also retain his previous
title of President.  Norbert Olberz, the principal shareholder and Chairman of
the Board of registrant, who had served as Interim Chief Executive Officer will
retain his position as Chairman of the Board.  Mr. Levra's base salary will be
$250,000 and Mr. Olberz base salary will be $300,000 under written employment
agreements not as yet finalized


     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.

                                       11
<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 12, 1999      /S/ Norbert J. Olberz
                                    -------------------------------------
                                    Norbert J. Olberz
                                    Chairman of the Board and
                                    Interim Chief Executive Officer
                                    (Duly Authorized Officer)



DATE:          August 12, 1999      /S/ Howard K. Kaminsky
                                    -------------------------------------
                                    Howard K. Kaminsky
                                    Senior Vice President-Finance, Chief
                                    Financial Officer, and Secretary
                                    (Principal Financial and Accounting Officer)

                                       12