Big Dog Holdings, Inc. reported consolidated net sales for the first quarter ended March 31, 2004 were $21.9 million as compared with $15.4 million in the first quarter 2003. Consolidated retail store sales increased 43% due to the addition of $5.3 million of revenue from The Walking Company and an increase of 9.1% comparable store sales from the Big Dog division.

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.

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.

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. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


                                                Three Months Ended
                                                    March 31,
                                             ------------------------
                                                2004         2003     
                                             -----------  -----------

NET SALES                                    $21,880,000  $15,354,000
COST OF GOODS SOLD                            10,659,000    7,251,000
GROSS PROFIT                                  11,221,000    8,103,000
OPERATING EXPENSES:
 Selling, marketing and distribution          14,132,000   11,311,000
 General and administrative                    1,797,000    1,201,000
   Total operating expenses                   15,929,000   12,512,000
LOSS FROM OPERATIONS                          (4,708,000)  (4,409,000)
INTEREST EXPENSE, NET                            124,000       62,000
LOSS BEFORE BENEFIT FROM INCOME TAXES         (4,832,000)  (4,471,000)
BENEFIT FROM INCOME TAXES                     (1,836,000)  (1,721,000)
NET LOSS                                     $(2,996,000) $(2,750,000)
NET LOSS PER SHARE
 BASIC AND DILUTED                                $(0.36)      $(0.33)