Big Dog Holdings first quarter top line was again lifted by the strong sales results at The Walking Company while the Big Dog Stores were relatively stable from a gross margin dollar standpoint. Overall sales increased 14.2% to $44.2 million compared to $38.7 million last year. Much of the top-line growth came from 13 new TWC stores, partially offset by the closure of 22 Big Dog stores. Total company comps increased 7.0% with TWC reporting a 12.6% comp sales increase and Big Dog reporting a 5.0% decline for the quarter.
During a conference call with analysts, BDOG CEO Andy Feshbach said that several new initiatives at TWC should boost sales in the future. One program is a collaboration with UGG that was described as “Brick & Clicks” where TWC will stock all UGG styles in their warehouse and give customers access to them via in-store kiosks. Feshbach was asked if he would consider doing a similar program with Crocs. He said that TWC would “never” carry Crocs because, “We are a specialty retailer of unique brands I just don't think that it's a unique product offering that is special for Walking Company to sell.”
Total consolidated gross profit for the quarter increased 70 basis points to 52.7% of net sales compared with 52.0% of net sales in the year-ago period. Margins at TWC increased 40 basis points to 52%, while margins at Big Dog increased 180 basis points to 54.5% of sales. Operating expenses in the first quarter 2007 were 66.0% of sales, compared to 64.4% of sales for the same period last year.
In spite of the higher margins, BDOG reported a consolidated operating loss for the first quarter 2007 of $5.9 million compared to $4.8 million for the first quarter 2006. The consolidated net loss per share for the first quarter 2007 increased to 44 cents per share, as compared with a consolidated net loss of 35 cents per share for the first quarter 2006. Much of the loss was due to abandoned leases for Big Dog store closures but one-time charges relating to the opening of BDOGs new distribution center also contributed.