The Walking Company Holdings, Inc. Announces Third Quarter 2008 Financial Results
Santa Barbara, California – November 14, 2008... The Walking Company Holdings, Inc. (NASDAQ: WALK; www.thewalkingcompany.com; www.bigdogs.com), a developer and retailer of branded, lifestyle consumer products, today reported the financial results for the third quarter ended September 30, 2008.
For the quarter ended September 30, 2008 consolidated net sales were $59,470,000 as compared with $56,554,000 in the third quarter 2007. Our consolidated net sales increased 5.2%, primarily due to the addition of 39 (net) new The Walking Company ("TWC") stores, offset by the closure of 67 (net) Big Dogs stores. The Company had a total of 276 stores opened (205 TWC stores and 71 Big Dogs stores) at the end of September 30, 2008, as compared to 303 stores (165 TWC stores and 138 Big Dogs stores) as of September 30, 2007. Comparative retail store sales increased 4.8% for the third quarter 2008 (1.5% increase for TWC, and a 12.6% increase for Big Dogs). Consolidated gross profit decreased to $28,691,000 or 48.2% of sales in the third quarter 2008, as compared with $30,195,000 or 53.4% of sales in the third quarter 2007. The overall decrease in consolidated gross profit is primarily the result of the planned liquidation of Big Dogs inventory. TWC gross margin was 50.1% compared to 51.6% last year. Big Dogs' gross margin decreased to 43.4% from 56.8% last year.
Consolidated operating expenses in the third quarter 2008 were $31,564,000, or 53.1% of consolidated net sales, compared to $29,251,000 or 51.7% in 2007. Consolidated operating loss for the third quarter 2008 was $2,873,000, compared to income of $944,000 for the third quarter 2007. The increase in operating expenses as a percentage of sales and the decrease in operating income, are largely attributable to the reduction in Big Dogs' revenue and contribution ($1,294,000 was recorded for store closure expense). As a result, the consolidated fully diluted net loss per share decreased to ($.27) per share as compared with ($.01) per share last year.
The Walking Company Holdings, Inc. consists of The Walking Company and Big Dogs. The Walking Company is a leading independent specialty retailer of high quality, technically designed comfort shoes and accessories that features premium brands such as ECCO, Mephisto, Dansko, Ugg, Pikolinos and MBT among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company currently operates 207 stores in premium malls across the nation. 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, value and fun. 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 71 retail stores, Big Dogs markets its products through its catalog, internet and corporate sales accounts.
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 sales and other results of the Company could differ significantly from those statements. Further information on the Company's risk factors is contained in the Company’s quarterly and annual reports as filed with the Securities and Exchange Commission.
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For Further Information
The Walking Company Holdings, Inc.
121 Gray Avenue
Santa Barbara, California 93101
www.walkingcompany.com
www.bigdogs.com
Contact
Alexis Dilg
Investor Information
(805) 963-8727, ext. 1302
alexisd@bigdogs.com
