Big Dog Holdings, Inc. Announces Second Quarter 2003 Results.

Business Editors

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Aug. 14, 2003

Big Dog Holdings, Inc. (Nasdaq:BDOG) (www.bigdogs.com), a developer, marketer and retailer of branded, lifestyle consumer products, today reported the financial results for the second quarter ended June 30, 2003.

For the quarter ended June 30, 2003, the Company had net income of $559,000 as compared to $793,000 for the second quarter 2002. Earnings per share for the quarter were $.07 versus $.09 per share for the same period last year. Contributing to such decrease was a 6% decrease in sales for the quarter as compared to last quarter. The net sales decrease was primarily due to a comparable store sales decline of 5.9% and a reduction in the number of stores. Gross margin increased to 58.7% from 58.3% last period and operating expenses decreased to $13.2 million from $13.6 million. The Company had 200 stores open at the end of the quarter as compared to 211 stores at June 30, 2002.

Commenting on the results, CEO Andrew Feshbach stated, "Overall our business is performing consistently with our expectations. We continue to see growth in our T-shirt and other graphic businesses and continued pressure on our basic, more commodity merchandise. While our business declined in the second quarter, the trend was improved over the first quarter and our trend continues to improve currently. We will continue to focus on maintaining the strength of our balance sheet, financial flexibility and continued improvement in expense management."

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, fun and a sense of humor. 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 198 retail stores as of August 14, 2003, Big Dogs markets its products through its catalog, better wholesale accounts and Internet sales.

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 filings with the Securities and Exchange Commission.

               BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS
                             (Unaudited)

                                                     June 30,
                                                2003         2002
                                ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                    $2,258,000   $1,602,000
 Receivables, net                                117,000      517,000
 Inventories                                  28,580,000   27,576,000
 Prepaid expenses and other current assets       928,000      953,000
 Deferred income taxes                         3,390,000    2,989,000
  Total current assets                        35,273,000   33,637,000
PROPERTY AND EQUIPMENT, Net                    4,671,000    5,893,000
INTANGIBLE ASSETS, Net                           123,000      149,000
OTHER ASSETS                                     344,000      353,000
 TOTAL                                       $40,411,000  $40,032,000

                 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Short-term borrowings                        $5,001,000   $6,953,000
 Accounts payable                              1,659,000    2,300,000
 Income taxes payable                                  -            -
 Accrued expenses and other current
  liabilities                                  3,290,000    3,060,000
  Total current liabilities                    9,950,000   12,313,000
DEFERRED RENT                                    616,000      763,000
DEFERRED GAIN ON SALE-LEASEBACK                  327,000      380,000
 Total liabilities                            10,893,000   13,456,000
STOCKHOLDERS' EQUITY                          29,518,000   26,576,000
 TOTAL                                       $40,411,000  $40,032,000


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

                      Three Months Ended         Six Months Ended
                           June 30,                  June 30,
                      2003         2002         2003         2002

NET SALES          $24,208,000  $25,763,000  $39,562,000  $43,309,000
COST OF GOODS SOLD   9,990,000   10,755,000   17,241,000   19,035,000
GROSS PROFIT        14,218,000   15,008,000   22,321,000   24,274,000
OPERATING
 EXPENSES:
 Selling,
  marketing and
  distribution      11,883,000   12,342,000   23,194,000   24,178,000
 General and
  administrative     1,333,000    1,227,000    2,534,000    2,451,000
  Total operating
   expenses         13,216,000   13,569,000   25,728,000   26,629,000
INCOME (LOSS) FROM
 OPERATIONS          1,002,000    1,439,000   (3,407,000)  (2,355,000)
OTHER INCOME                 -            -       (1,000)      (2,000)
INTEREST EXPENSE       101,000      150,000      164,000      233,000
INCOME (LOSS)
 BEFORE PROVISION
 (BENEFIT) FOR
  INCOME TAXES         901,000    1,289,000   (3,570,000)  (2,586,000)
PROVISION (BENEFIT)
 FOR INCOME TAXES      342,000      496,000   (1,379,000)    (996,000)
NET INCOME (LOSS)     $559,000     $793,000  $(2,191,000) $(1,590,000)
NET INCOME (LOSS)
 PER SHARE:
 BASIC AND DILUTED       $0.07        $0.09       $(0.26)      $(0.19)

WEIGHTED AVERAGE
 SHARES
 OUTSTANDING:
 BASIC AND DILUTED   8,330,000    8,404,000    8,361,000    8,393,000