<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q

(Mark One)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act for 1934 for the quarterly period ended December 31, 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
incorporation or organization)                         Identification No.)

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

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

                                Not Applicable
   (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 ___
    ---

Number of shares outstanding of the registrant's common stock as of February 1,
2000:

                              6,577,000

                                      -1-
<PAGE>

                              SPORT CHALET, INC.
                              ------------------

                              Index to Form 10-Q

                        Part I - Financial Information
                        ------------------------------

                                                                            Page
                                                                            ----
Item 1.   Financial Statements...........................................      3

Item 2.   Management's Discussion and Analysis of Financial Condition
          and the Results of Operations..................................      7


                          Part II - Other Information
                          ---------------------------

Item 5.   Other Information..............................................     10

Item 6.   Exhibits and Reports on Form 8-K...............................     10

                                      -2-
<PAGE>

                        Part I - Financial Information
                        ------------------------------


     Item 1.   Financial Statements.
               ---------------------

                              SPORT CHALET, INC.

                        CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              Three months ended                 Nine months ended
                                                         ----------------------------       ----------------------------
                                                                 December 31,                       December 31,
                                                         ----------------------------       ----------------------------
                                                             1999            1998               1999            1998
                                                         ------------    ------------       ------------    ------------
<S>                                                      <C>             <C>                <C>             <C>
Net sales.......................................         $ 50,488,760    $ 47,234,297       $126,835,949    $115,523,159
Cost of goods sold, buying and occupancy........           34,798,912      32,137,224         88,387,679      80,009,951
                                                         ------------    ------------       ------------    ------------
Gross profit....................................           15,689,848      15,097,073         38,448,270      35,513,208
Selling, general and administrative expenses....           12,309,567      10,724,878         32,353,910      28,648,812
                                                         ------------    ------------       ------------    ------------
Income from operations..........................            3,380,281       4,372,195          6,094,360       6,864,396
Interest income.................................              (24,241)        (41,672)          (173,451)       (118,595)
                                                         ------------    ------------       ------------    ------------
Income before taxes.............................            3,404,522       4,413,867          6,267,811       6,982,991
Income tax provision............................            1,357,000       1,822,000          2,497,000       2,871,000
                                                         ------------    ------------       ------------    ------------
Net income......................................         $  2,047,522    $  2,591,867       $  3,770,811    $  4,111,991
                                                         ============    ============       ============    ============

Earnings per share:
     Basic......................................         $        .31    $        .40       $        .57    $        .63
                                                         ============    ============       ============    ============
     Diluted....................................         $        .30    $        .38       $        .56    $        .61
                                                         ============    ============       ============    ============

Weighted average number
     of common shares outstanding:
     Basic......................................            6,577,000       6,532,000          6,577,000       6,528,889
                                                         ============    ============       ============    ============
     Diluted....................................            6,777,944       6,779,044          6,776,721       6,696,307
                                                         ============    ============       ============    ============
</TABLE>

                            See accompanying note.

                                      -3-
<PAGE>

                              SPORT CHALET, INC.

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                               December 31,               March 31,
                                                                                  1999                      1999
                                                                            -----------------         -----------------
                                                                               (Unaudited)
<S>                                                                         <C>                       <C>
ASSETS
------
Current assets:
  Cash................................................................           $  5,627,171              $ 10,829,102
  Accounts receivable - net...........................................                796,062                   604,296
  Merchandise inventories.............................................             43,465,941                29,518,546
  Prepaid expenses and other current assets...........................                198,616                   268,343
  Deferred income tax.................................................              1,163,920                 1,263,779
                                                                                 ------------              ------------
     Total current assets.............................................             51,251,710                42,484,066
Furniture, equipment and leasehold improvements - net.................             17,138,249                13,501,416
Other assets..........................................................                445,739                   581,262
                                                                                 ------------              ------------
     Total assets.....................................................           $ 68,835,698              $ 56,566,744
                                                                                 ============              ============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
  Accounts payable....................................................           $ 15,436,434              $ 11,228,511
  Salaries and wages payable..........................................              2,106,856                 2,962,400
  Other accrued expenses..............................................              8,506,941                 4,491,568
  Income tax payable..................................................              1,813,871                   802,943
                                                                                 ------------              ------------
     Total current liabilities........................................             27,864,102                19,485,422
Deferred income taxes.................................................                 92,353                   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
     December 31, 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...................................................             19,153,566                15,382,755
                                                                                 ------------              ------------
     Total shareholders' equity.......................................             40,879,243                36,980,182
                                                                                 ------------              ------------
     Total liabilities and shareholders' equity.......................           $ 68,835,698              $ 56,566,744
                                                                                 ============              ============
</TABLE>

                            See accompanying note.

                                      -4-
<PAGE>

                              SPORT CHALET, INC.

                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  Nine months ended December 31,
                                                                                  ------------------------------

                                                                                     1999               1998
                                                                                  ------------      ------------
<S>                                                                               <C>               <C>
Operating activities
Net income....................................................................    $  3,770,811      $  4,111,991
Adjustments to reconcile net income to net cash provided
  by operating activities:
    Depreciation and amortization.............................................       2,904,502         1,770,000
    Stock compensation........................................................         128,250            45,500
    Deferred income taxes.....................................................          91,072           614,143
    Changes in operating assets and liabilities:
      Accounts receivable.....................................................        (191,766)           65,245
      Merchandise inventories.................................................     (13,947,395)       (4,649,706)
      Prepaid expenses and other current assets...............................          69,727           (46,118)
      Accounts payable........................................................       4,207,923         1,316,430
      Salaries and wages expenses.............................................        (855,544)         (329,585)
      Other accrued expenses..................................................       4,015,373         3,152,329
      Income tax payable......................................................       1,010,928         1,707,094
                                                                                  ------------      ------------
Net cash provided by operating activities.....................................       1,203,881         7,757,323

Investing activities
Other assets..................................................................         135,523          (579,270)
Purchase of furniture, equipment and leasehold improvements...................      (6,541,335)       (2,022,256)
                                                                                  ------------      ------------
Net cash used in investing activities.........................................      (6,405,812)       (2,601,526)

Financing activities
Proceeds from bank borrowings.................................................               -                 -
Principal payments on bank loans..............................................               -                 -
                                                                                  ------------      ------------
Net cash used in financing activities.........................................               -                 -

(Decrease) increase in cash...................................................      (5,201,931)        5,155,797
Cash at beginning of period...................................................      10,829,102         4,970,335
                                                                                  ------------      ------------
Cash at end of period.........................................................    $  5,627,171      $ 10,126,132
                                                                                  ============      ============

Cash paid during the year for:
     Income taxes.............................................................    $  1,395,000      $    550,000
     Interest.................................................................               -                 -
</TABLE>

                            See accompanying note.

                                      -5-
<PAGE>

                              SPORT CHALET, INC.

                         NOTE TO FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.   The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments, consisting of normal recurring
accruals, considered necessary for a fair presentation of the results of
operations for the periods presented have been included.

     The financial data at March 31, 1999 is derived from audited financial
statements which are included in the Company's Annual Report on Form 10-K for
the year ended March 31, 1999, and should be read in conjunction with the
audited financial statements and notes thereto. Interim results are not
necessarily indicative of results for the full year.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

                                      -6-
<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 notes thereto provided under Item 1 above.

Results of Operations

     Three Months Ended December 31, 1999 Compared to Three Months Ended
December 31, 1998. Sales have increased 6.9% to $50.5 million for the current
fiscal quarter compared to $47.2 million for the same quarter last year. The
increase is primarily the result of three new stores, partially offset by a 5.5%
decrease in comparable store sales. Comparable store sales are based upon stores
opened throughout both periods. The decrease in comparable store sales is
primarily due to reduced sales of winter related merchandise due to unusually
warm and dry weather in Southern California. Sales of non-winter related
merchandise was up 3.7% on a comparable store basis in the current fiscal
quarter compared to the same quarter last year.

     Gross profit as a percent of sales decreased to 31.1% compared to 32.0% for
the same quarter last year, partially as the result of markdowns taken to
stimulate sales growth. In addition the decrease in comparable store sales
caused occupancy costs to increase as a percent of sales.

     Selling, general and administrative expenses as a percent of sales
increased from 22.7% to 24.4% primarily as the result of decreased comparable
store sales and the costs associated with opening one new store and relocating
another during the quarter.

     Interest income decreased slightly from $42,000 to $24,000.

     The effective income tax rate was 39.9%, compared to 41.3% 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 decreased from $2.6 million, or $.38 per diluted share to $2.0
million or $.30 per diluted share, primarily as a result of reduced gross profit
margin and increased selling, general and administrative expenses.

     Nine Months Ended December 31, 1999 Compared to Nine Months Ended December
31, 1998. Sales have increased 9.8% to $126.8 million compared to $115.5 million
for the same period last year. The increase is the result of four new stores
opening since June 1998. Comparable store sales are flat as increases reflected
in the first half of the fiscal year were offset by the decrease in the third
quarter. The decrease is primarily due to reduced sales of winter related
merchandise due to unusually warm and dry weather in Southern California. Sales
of non-winter related merchandise was up 3.7% on a comparable store basis.

     Gross profit as a percent of sales decreased to 30.3% from 30.7%, primarily
as the result of markdowns taken in excess of those taken during the same period
last year in an attempt to stimulate sales growth.

     Selling, general and administrative expenses as a percent of sales
increased from 24.8% to 25.5% primarily the result of the costs associated with
opening new stores.

                                      -7-
<PAGE>

     Interest income increased slightly to $173,000 from $119,000 during the
same period last year.

     The effective income tax rate was 39.8%, compared to 41.1% 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 decreased to $3.8 million from $4.1 million and earnings per
share decreased to $.56 per diluted share from $.61 per diluted share, primarily
as a result of the costs associated with opening new stores.

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 provided by operating activities was $1.2 million for the nine
months ended December 31, 1999 compared to net cash provided by operating
activities of $7.8 million for the same period last year. Net income provided
$3.8 million and $4.1 million for the nine months ended December 31, 1999 and
1998, respectively. Depreciation also provided $2.9 million and $1.8 million of
non-cash for the same periods.

     Inventories increased by $13.9 million and $4.6 million for the nine months
ended December 31, 1999 and 1998, respectively, due to the seasonal build-up of
winter related inventory. Inventory at December 31, 1999 is $11.0 million
greater than the same time last year primarily due to the opening of three new
stores during the nine months ended December 31, 1999 and, to a lesser extent,
the result of lower than anticipated sales of winter related merchandise due to
unusually warm and dry weather in Southern California. Accounts payable
increased by $4.2 million and $1.3 million for the respective periods due
primarily to inventory build-up and the timing of payments to vendors.

     Net cash used in investing activities increased to $6.4 million from $2.6
million primarily due to the opening of three new stores and the relocation of
an existing store during the nine months ended December 31, 1999 compared to one
new store in the same time period last year.

     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 nine-month period ended December 31, 1999 or 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.

                                      -8-
<PAGE>

     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 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. To
date there have been no significant problems related to the Year 2000 issue.

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.

                                      -9-
<PAGE>

                          Part II - Other Information

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

     As of October 1, 1999, the Company entered into employment agreements with
Dennis D. Trausch, Howard K. Kaminsky, and Ronald G. Mann, the Company's
Executive Vice President, Senior Vice President - Finance and Senior Vice
President - General Merchandise Manager, respectively.

     The initial term of each such agreement ends on March 31, 2000 and
automatically renews for additional twelve month periods unless notice is given
by either party. In consideration for services rendered under these agreements,
Messrs. Trausch, Kaminsky, and Mann are entitled to (i) receive an annual base
salary of $170,000, $170,000, and $160,000, respectively, (ii) participate in
such executive bonus programs as the Company may establish from time to time,
(iii) an annual vacation of up to four weeks, (iv) a monthly automobile
allowance of $900, (v) participation by the executive and his immediate family
in such healthcare plans as may be provided to executive officers of the Company
generally and (vi) reimbursement for personal tax and financial advisory
services up to $750 per year. Under the Senior Management Bonus Plan currently
in effect, each executive's maximum target annual bonus will be 35% of his base
salary. Upon the termination of employment within three years of "Change of
Control" (as defined) either by the Company without "Cause" (as defined) or by
the executive by reason of a "Change of Duties," the Company will continue to
pay the executive's base salary for twelve months.

     The term "Change in Control" includes the following events, among others
(i) Norbert Olberz ceases to be the Chairman of the Board of the Company, (ii)
the directors for whose nomination Mr. Olberz last voted in favor cease to be a
majority of the Company's directors or (iii) any person or group (other than a
trust, estate or entity controlled by Norbert or Irene Olberz) becomes the
beneficial owner of 50% or more of the Company's voting securities. The term
"Change in Duties" includes, among other things, (i) a significant change in the
nature of the executive's authority, (ii) a significant reduction in salary,
(iii) a decrease in the executive's eligibility to participate in bonus
compensation plans or benefits and (iv) a change in the executive's principal
place of employment. The term "Cause" includes (i) the executive's continued and
willful failure or refusal to perform his duties, (ii) the commission of any
dishonesty, fraud, misrepresentation or other misconduct in the performance of
such duties and (iii) the commission of a felony or crime include moral
turpitude.

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

          (a)  Exhibits
               10.1  Employment Agreement for Dennis D. Trausch
               10.2  Employment Agreement for Howard K. Kaminsky
               10.3  Employment Agreement for Ronald G. Mann
               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:   February 10, 2000                /s/ Craig L. Levra
                                        -------------------------------------
                                        Craig L. Levra
                                        President and Chief Executive Officer
                                        (Duly Authorized Officer)



DATE:   February 10, 2000                /s/ Howard K. Kaminsky
                                        -------------------------------------
                                        Howard K. Kaminsky
                                        Senior Vice President-Finance, Chief
                                        Financial Officer, and Secretary
                                        (Principal Financial
                                        and Accounting Officer)

                                      -11-