892907--6/13/2007--SPORT_CHALET

related topics

{stock, price, operating}

{acquisition, growth, future}

{system, service, information}

{product, market, service}

{operation, natural, condition}

{condition, economic, financial}

{competitive, industry, competition}

{personnel, key, retain}

{product, liability, claim}

{provision, law, control}

{regulation, change, law}

{cost, operation, labor}

{loan, real, estate}

We are replacing our legacy merchandise and financial systems. Changes to our systems may disrupt our supply chain operations and have a material adverse impact on our business and results of operations. Implementing Section 404 of the Sarbanes-Oxley Act of 2002 will be expensive, time-consuming and require significant management attention, and may not be successful. A downturn in the economy may affect consumer purchases of discretionary items, which would reduce our net sales. Terrorist attacks or acts of war may harm our business. Intense competition in the sporting goods industry could limit our growth and reduce our profitability. Because our stores are concentrated in the western portion of the United States, we are subject to regional risks. We rely on one distribution center and any disruption could reduce our sales. Our ability to expand our business will be dependent upon our ability to meet challenges in new markets. We may pursue strategic acquisitions, which could have an adverse impact on our business. Our future growth will be dependent on the availability of additional financing. If we are unable to successfully implement our controlled growth strategy or manage our growing business, our future operating results could suffer. If we lose key management or are unable to attract and retain talent, our operating results could suffer. Seasonal fluctuations in the sales of sporting goods could cause our annual operating results to suffer. Our quarterly operating results may fluctuate substantially, which may adversely affect our business. We are controlled by our Founder and management, whose interests may differ from other stockholders. Problems with our information systems could disrupt our operations and negatively impact our financial results. Failure to protect the integrity and security of our customers information could expose us to litigation and materially damage our standing with our customers. If we are unable to predict or react to changes in consumer demand, we may lose customers and our sales may decline. The price of our Class A Common Stock and Class B Common Stock may be volatile. Provisions in the Company's charter documents could discourage a takeover that stockholders may consider favorable. We may be subject to product liability claims and our insurance may not be sufficient to cover damages related to those claims. Our comparable store sales will fluctuate and may not be a meaningful indicator of future performance.

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892907--6/13/2007--SPORT_CHALET_INC