Big Dog Holdings, Inc. announced earnings for the fourth quarter ended December 31, 2002, of $.44 per share, which was equal to $.44 per share earned in the fourth quarter 2001. Earnings for the year ended December 31, 2002, were $.45 as compared to $.31 for 2001. Merchandise margins for the year increased to 56.8% as compared to 56.3% last year. Operating expenses for 2002 were 52.2% of sales, as compared to 51.9% of sales in the prior year. As previously announced, Big Dogs net total sales for the fourth quarter of 2002 were $35.3 million, an 11.6% decrease as compared to $40.0 million in 2001, and for the year were $108.8 million, a 3.2% decrease as compared to $112.4 million in 2001.

Andrew Feshbach, Chief Executive Officer, commenting on the fourth quarter and year-end results stated, “Although we started 2002 well, the latter part of the year was a challenging economic period for retailers and Big Dogs. We saw consistently lower traffic at our malls especially in the fourth quarter. We have taken every opportunity to strengthen our balance sheet, maximize results and operate efficiently. Our merchandising margins remain strong as we experienced a shift from promotional sales to higher-margined T-shirt sales. Our operating costs were further reduced as our fourth quarter and annual operating expenses in 2002 were less than in 2001, even with a 6% increase in our store base at year-end. So far, 2003 has continued at the same pace as the fourth quarter but recent sales trends have begun to improve and we have a positive outlook for the coming year.”

Big Dogs has been informed by the NASDAQ that the market value of its publicly traded shares has fallen below the threshold required for the National Market, and if the threshold is not met by May 28, 2003, the shares will be required to be listed on the NASDAQ Small Cap Market or over the counter on the OTCBB. In either case, the liquidity and ease of trading Big Dogs shares will likely decline if they are required to move from the National Market.

                 BIG DOG HOLDINGS, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF OPERATIONS


                    Three Months Ended             Year Ended

                       December 31,               December 31,

                    2002         2001          2002          2001


NET SALES       $35,333,000  $39,985,000  $108,756,000  $112,369,000

COST OF

 GOODS SOLD      15,238,000   17,627,000    46,970,000    49,154,000

GROSS PROFIT     20,095,000   22,358,000    61,786,000    63,215,000

OPERATING EXPENSES:

 Selling, marketing and

  distribution   14,233,000   14,583,000    51,528,000    52,660,000

 General and

  administrative  1,512,000    1,665,000     5,252,000     5,618,000

  Total operating

   expenses      15,745,000   16,248,000    56,780,000    58,278,000

INCOME FROM

 OPERATIONS       4,350,000    6,110,000     5,006,000     4,937,000

OTHER INCOME              -            -             -       334,000

INTEREST INCOME   1,226,000        3,000     3,175,000        39,000

INTEREST EXPENSE (1,393,000)    (165,000)   (3,761,000)   (1,158,000)

INCOME BEFORE PROVISION

 FOR INCOME TAXES 4,183,000    5,948,000     4,420,000     4,152,000

PROVISION FOR

 INCOME TAXES      (512,000)  (2,253,000)     (603,000)   (1,512,000)

NET INCOME       $3,671,000   $3,695,000    $3,817,000    $2,640,000