Sport Chalet Inc. looks certain to finish as one of the year’s winning stocks, even if the final quarter proves a letdown.

The last two weeks, in particular, have been rocky for the La Canada Flintridge sporting goods retailer. Since hitting a 52-week high Dec. 10, the stock has plunged nearly 60 percent in a slide that has both the company and analysts baffled.

Still, after starting 2009 under a buck, Sport Chalet is up nearly 500 percent for the year and still looking attractive as it trades for around $2.50 – a fraction of its $70 high in 2005. (See related end-of-year stock story page 1.)

Investors generally like how the company has adapted to a brutal retail market, said Sean McGowan, an analyst at Needham & Co. in New York. During 2009, management has slashed expenses and restructured debt.

“At this point, their capital spending is bare bones and other costs are minimal,” McGowan said. “They are responding appropriately and when the economy gets an upturn they will be well positioned.”

Another boon for the company: cold weather. With the winter months approaching, consumers often look to high-end retailers such as Sport Chalet for expensive ski and winter gear. However, the company’s reputation as a premium-service, high-priced retailer is not helping it, especially as it faces increased competition from discounters, including Dick’s Sporting Goods, the nation’s largest recreation retailer.

Sport Chalet has been able to cut quarterly losses, but same-store sales continue to suffer, off 12.4 percent in the third quarter. Camilo Lyon, an analyst at Wedbush Morgan Securities in New York, estimates that Sport Chalet will lose 79 cents per share in the fourth quarter, a slight improvement from the 84 cent loss in 2008. He gives the stock a neutral rating.

“Our concern is that with no store growth planned in the foreseeable future, comparable growth must come from increased traffic, a formidable task considering Dick’s is becoming more aggressive in the Southern California market,” Lyons wrote in a report Dec. 9.

Most recently, the stock spiked to nearly $6 earlier this month before settling back down to its already heady gains – and analysts and the company didn’t seem to know why.

The increase coincided with a move by the company to end employees’ ability to purchase shares through their retirement plans, but the company said the price change was unrelated.

“We have no information on why a large volume of stock traded last week,” Chief Financial Officer Howard Kaminsky told the Business Journal in an e-mail. “It has happened three times since July and doesn’t seem related to any information release from the company or any information release from others about the company. We are not aware of any significant change in institutional holdings of our stock.”