SANTA BARBARA, CA, May 20, 2004 - Big Dog Holdings, Inc. (NASDAQ: BDOG; www.bigdogs.com; www.thewalkingcompany.com), a developer and retailer of branded, lifestyle consumer products, today reported the financial results for the first quarter ended March 31, 2004 . The results for the first quarter include, since March 3, 2004 , the Company's acquisition of substantially all the assets of The Walking Company. The Walking Company ("TWC") is the leading specialty retailer of high-quality, technically designed comfort walkwear and accessories.

For the quarter ended March 31, 2004 , consolidated net sales were $21,880,000 as compared with $15,354,000 in the first quarter 2003. Our consolidated retail store sales increased 43% due to the addition of $5,300,000 of revenue from our new TWC division and an increase of 9.1% comparable store sales from our Big Dog division for the quarter. The Company had a total of 263 stores opened (191 Big Dog stores and 72 Walking Company stores) at the end of the period as compared with 200 Big Dog stores on March 31, 2003. Our consolidated net sales reported only include sales of TWC since its acquisition on March 3, 2004 which included a comparable store sales increase of 8.4% for those operations. Total consolidated gross profit for the quarter increased to $11,221,000 as compared with $8,103,000 in the first quarter 2003. The overall increase in consolidated gross profit is the result of contributions from our new TWC division. Big Dogs margin contribution for the period was stable at 52.5% as compared to last year.

Andrew Feshbach, Chief Executive Officer, stated, "Our business experienced solid operating results in the first quarter, as both our Big Dogs and the newly acquired TWC divisions posted strong comparable store sales increases. I am also pleased that gross margins for both divisions have remained steady and our sales trend into the 2nd quarter remains strong."

Consolidated operating expenses in the first quarter 2004 were $15,929,000 or 72.8% of sales compared to $12,512,000 or 81.5% in 2003. The dollar increase in consolidated operating expenses primarily relates to the TWC acquisition, while the decrease in such expenses as a percentage of sales is attributable to leveraging these expenses over a larger revenue base in addition to efficiencies created as a result of the TWC acquisition. The consolidated net loss per share for the first quarter increased to $.36 per share, as compared with a consolidated net loss of $.33 per share for the first quarter 2003 primarily due to non-recurring charges relating to the acquisition and start-up of TWC and Lifeforms.

Commenting on the financial results, Andrew Feshbach, Chief Executive Officer, stated, "We are happy with the acquisition of TWC and already are ahead of projection in executing our integration plan. We are beginning to achieve operating leverage over the last few months and firmly believe this trend will continue for the balance of this fiscal year."

Big Dog Holdings, Inc. consists of Big Dogs and The Walking Company. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including activewear, casual sportswear, accessories and gifts. The BIG DOGS® brand image is one of quality, value and fun. The BIG DOGS® brand is designed to appeal to people of all ages and demographics, particularly baby boomers and their kids, big and tall customers, and pet owners. In addition to its 188 retail stores, Big Dogs markets its products through its catalog, internet and corporate sales accounts. The Walking Company is a leading independent specialty retailer of high quality, technically designed comfort shoes and accessories that features premium brands such as ECCO, Mephisto, Dansko, Birkenstock and Merrell among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates 74 stores in premium malls across the nation.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of the Company could differ significantly from those statements. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission.


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Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, California 93101


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Laura Russell
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(805) 963-8727, ext. 1360