The Walking Company Q2 Comps Jump 18.3%

Big Dog Holdings, for the quarter ended June 30, 2005, consolidated net sales were $43.4 million as compared with $41.0 million in the second quarter 2004. Consolidated retail sales increased 6%, primarily due to comparative store sales increase of 7%. Comparative store sales declined 2.5% for the Big Dogs chain and increased 18.3% for the TWC chain. Consolidated gross profit increased to $24,680,000 in the second quarter 2005 as compared with $23,031,000 in the second quarter 2004. The overall increase in consolidated gross profit is the result of increased sales as well as an increase in margin contribution from Big Dog and TWC. Big Dogs' margin contribution for the period increased to 61.7% as compared to last year's margin contribution of 60.5% and the gross margin for the TWC chain increased to 51.8% as compared to 50.5% for 2004.

Consolidated operating expenses in the second quarter 2005 were $21,613,000 or 49.8% of sales compared to $20,813,000 or 50.7% in the second quarter 2004. The decrease in such expenses as a percentage of sales is attributable to leveraging these expenses over a larger revenue base. The consolidated fully diluted net income per share for the second quarter 2005 increased to $.18 per share, as compared with a consolidated fully diluted net income per share of $.14 for the second quarter 2004.

Andrew Feshbach, Chief Executive Officer, stated, “We are very pleased with the results of our 2nd quarter and improvements over last year and continue to see this trend going into our 3rd quarter for both chains.”

Other Business:

As previously announced, the Company signed a definitive agreement to purchase the assets of Footworks, a division of the privately held shoe retailer, Bianca of Nevada, Inc. for approximately $10 million. Footworks operates a chain of 8 retail stores selling comfort shoes and accessories. This transaction is working toward completion and is expected to close in August.

                  BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)

                           Three Months Ended         Six Months Ended
                                 June 30,                  June 30,
                            2005         2004         2005         2004
                        -----------  -----------  -----------  -----------

NET SALES               $43,441,000  $41,043,000  $74,786,000  $62,924,000
COST OF GOODS SOLD       18,761,000   18,013,000   33,879,000   28,672,000
                        -----------  -----------  -----------  -----------
GROSS PROFIT             24,680,000   23,030,000   40,907,000   34,252,000
                        -----------  -----------  -----------  -----------
OPERATING EXPENSES:
  Selling, marketing
   and distribution      19,327,000   18,875,000   37,594,000   33,008,000
  General and
   administrative         2,286,000    1,936,000    4,029,000    3,733,000
                        -----------  -----------  -----------  -----------
    Total operating
     expenses            21,613,000   20,811,000   41,623,000   36,741,000
                        -----------  -----------  -----------  -----------
INCOME (LOSS) FROM
 OPERATIONS               3,067,000    2,219,000     (716,000)  (2,489,000)
OTHER INCOME                      -       82,000            -       82,000
INTEREST INCOME               1,000       64,000       41,000       70,000
INTEREST EXPENSE           (297,000)    (347,000)    (448,000)    (477,000)
                        -----------  -----------  -----------  -----------
INCOME (LOSS) BEFORE
 PROVISION (BENEFIT)
 FOR INCOME TAXES         2,771,000    2,018,000   (1,123,000)  (2,814,000)
PROVISION (BENEFIT) FOR
 INCOME TAXES             1,053,000      767,000     (427,000)  (1,069,000)
                        -----------  -----------  -----------  -----------
NET INCOME (LOSS)       $ 1,718,000  $ 1,251,000  $  (696,000) $(1,745,000)
                        ===========  ===========  ===========  ===========
NET INCOME (LOSS)
 PER SHARE
  BASIC                 $      0.19  $      0.15  $     (0.08) $     (0.21)
                        ===========  ===========  ===========  ===========
  DILUTED               $      0.18  $      0.14  $     (0.08) $     (0.21)
                        ===========  ===========  ===========  ===========

WEIGHTED AVERAGE SHARES
 OUTSTANDING:

  BASIC                   9,182,000    8,261,000    9,181,000    8,252,000
                        ===========  ===========  ===========  ===========
  DILUTED                 9,756,000    8,907,000    9,181,000    8,252,000
                        ===========  ===========  ===========  ===========