<PAGE>
               UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
                            Washington, D.C. 20549 
 
 
                                   FORM 10-Q 
 
 
              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
                     THE SECURITIES EXCHANGE ACT OF 1934 
 
                   FOR THE SECOND QUARTER ENDED MAY 3, 1997 
 
 
                          Commission File Number 0-934 
 
 
 
                              B.B. WALKER COMPANY 
             ------------------------------------------------------ 
             (Exact name of registrant as specified in its charter) 
 
 
 
           North Carolina                                    56-0581797     
  -------------------------------                         ---------------- 
  (State or other jurisdiction of                         (I.R.S. Employer 
   incorporation or organization)                         Identification No.) 
 
 
  414 East Dixie Drive, Asheboro, NC                            27203     
----------------------------------------                      ---------- 
(Address of principal executive offices)                      (Zip Code) 
 
 
Registrant's telephone number, including area code:        (910) 625-1380 
 
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports) and (2) has been subject to such 
filing requirements for the past 90 days.  Yes  X     No 
                                               ---       --- 
 
On June 10, 1997, 1,726,534 shares of the Registrant's voting common stock 
with a par value of $1.00 per share were outstanding. 
 
 
<PAGE> 
                              B.B. WALKER COMPANY
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)
 
 
                                               (Unaudited)
                                                  May 3,          November 2, 
               Assets                              1997              1996
               ------                           -----------       ----------- 
 
Cash                                            $        1        $        1  
Accounts receivable, less allowance 
  for doubtful accounts of $461 in 
  1997 and $742 in 1996                              7,983            10,808 
Inventories                                         10,201            12,511 
Prepaid expenses                                       250               441 
Income tax recovery receivable                         209             1,042 
Deferred income tax benefit                           -                  150 
                                                   -------           ------- 
    Total current assets                            18,644            24,953 

Property, plant and equipment, net of 
  accumulated depreciation and amortization 
  of $6,037 in 1997 and $5,906 in 1996               1,969             2,208 
Other assets                                           204               214 
                                                   -------           ------- 
                                                $   20,817        $   27,375 
                                                   =======           ======= 



























                                       1
                                                                  (Continued)
<PAGE> 
                              B.B. WALKER COMPANY 
                    CONSOLIDATED BALANCE SHEETS, Continued 
                                (In thousands) 
 
 
                                               (Unaudited)
                                                  May 3,          November 2, 
  Liabilities and Shareholders' Equity             1997              1996
  ------------------------------------          -----------       ----------- 
 
Borrowings under finance agreement              $    7,152        $   11,464 
Current portion of long-term obligations             1,144             1,304 
Accounts payable, trade                              3,646             4,984 
Accrued salaries, wages and bonuses                    776             1,102 
Other accounts payable and accrued liabilities         594               680 
                                                   -------           ------- 
    Total current liabilities                       13,312            19,534 
                                                   -------           ------- 

Long-term obligations                                3,107             3,286 
Minority interests in consolidated subsidiary           33                33 

Shareholders' equity:
  7% cumulative preferred stock, $100 par value,
    1,150 shares authorized, 828 shares issued
    and outstanding in 1997 and 1996                    83                83 
  Common stock, $1 par value, 6,000,000 shares
    authorized, 1,726,534 shares issued and
    outstanding in 1997 and 1996                     1,727             1,727 
  Capital in excess of par value                     2,724             2,724 
  Retained earnings (deficit)                          (55)              111 
  Shareholders' loans                                 (114)             (123)
                                                   -------           ------- 
    Total shareholders' equity                       4,365             4,522 
                                                   -------           ------- 
                                                $   20,817        $   27,375 
                                                   =======           ======= 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes to consolidated financial statements are an integral 
part of these financial statements.


                                       2
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                        CONSOLIDATED STATEMENTS OF INCOME 
                      (In Thousands, Except Per Share Data) 
<TABLE>
<CAPTION>
                                                           (Unaudited)                         (Unaudited)  
                                                       Second Quarter Ended                 Six Months Ended
                                                    --------------------------         --------------------------
                                                       May 3,         May 4,              May 3,         May 4, 
                                                        1997           1996                1997           1996   
                                                    -----------    -----------         -----------    -----------
<S>                                                 <C>            <C>                 <C>            <C>
Net sales                                           $    8,099     $    9,046          $   16,388     $   19,066 
Interest and other income                                   15             21                  47             27 
                                                    -----------    -----------         -----------    -----------
    Total revenues                                       8,114          9,067              16,435         19,093 
                                                    -----------    -----------         -----------    -----------
 
Cost of products sold                                    6,001          7,040              12,182         14,618 
Selling and administrative expenses                      1,722          2,480               3,602          4,993 
Depreciation and amortization                              114            164                 239            326 
Interest expense                                           294            354                 654            794 
                                                    -----------    -----------         -----------    -----------
    Total costs and expenses                             8,131         10,038              16,677         20,731 
                                                    -----------    -----------         -----------    -----------
Loss before income taxes and 
  minority interest                                        (17)          (971)               (242)        (1,638)
 
Provision for (benefit from) income taxes                   10           (335)                (80)          (554)
Minority interest                                          -              -                     1              1 
                                                    -----------    -----------         -----------    -----------
    Net loss                                               (27)          (636)               (163)        (1,085)
 
Retained earnings (deficit) at beginning of period         (26)         3,708                 111          4,158 
Dividends on preferred stock                                (2)            (2)                 (3)            (3)
                                                    -----------    -----------         -----------    -----------
Retained earnings (deficit) at end of period        $      (55)    $    3,070          $      (55)    $    3,070 
                                                    ===========    ===========         ===========    ===========
 
Net loss per share: 
 
      Primary                                       $     (.02)    $     (.37)         $     (.10)    $     (.63)
                                                    ===========    ===========         ===========    ===========
      Fully diluted                                 $     (.02)    $     (.37)         $     (.10)    $     (.63)
                                                    ===========    ===========         ===========    ===========
 
Weighted average common shares outstanding:
 
      Primary                                            1,737          1,728               1,741          1,728 
                                                    ===========    ===========         ===========    ===========
      Fully diluted                                      1,737          1,728               1,741          1,728 
                                                    ===========    ===========         ===========    ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral 
part of these financial statements.

                                       3
<PAGE> 
                              B.B. WALKER COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                                            (Unaudited) 
                                                            Six Months 
                                                               Ended 
                                                     ------------------------ 
                                                        May 3,        May 4,
                                                         1997          1996
                                                     -----------   ----------- 
Cash Flows From Operating Activities:
  Net loss                                           $     (163)   $   (1,085) 
  Adjustments to reconcile net loss to net 
   cash provided by operating activities:
    Depreciation and amortization                           239           326 
    Gain on sale of property, plant and equipment           (26)           (2)
    Deferred income taxes                                   150           -   
    (Increase) decrease in:
     Accounts receivable, net                             2,825         1,985 
     Inventories                                          2,310         2,891 
     Prepaid expenses                                       191            69 
     Other assets                                            10            51 
    Increase (decrease) in:
     Accounts payable, trade                             (1,338)       (1,717)
     Accrued salaries, wages and bonuses                   (326)          (19)
     Other accounts payable and accrued liabilities         (86)          533 
     Income taxes payable                                   833           252 
                                                        -------       ------- 
  Net cash provided by operating activities               4,619         3,284 
                                                        -------       ------- 
Cash Flows From Investing Activities:
  Capital expenditures                                     -              (15)
  Proceeds from disposal of property, 
    plant and equipment                                      26             2 
                                                        -------       ------- 
  Net cash provided by (used for) 
    investing activities                                     26           (13)
                                                        -------       ------- 
Cash Flows From Financing Activities:
  Net borrowing under finance agreement                  (4,312)       (2,866)
  Proceeds from issuance of long-term obligations            66            32 
  Payment on long-term obligations                         (405)         (442)
  Loans to shareholders, net of repayments                    9             8 
  Dividends paid on 7% cumulative preferred stock            (3)           (3)
                                                        -------       ------- 
  Net cash used for financing activities                 (4,645)       (3,271)
                                                        -------       ------- 
 
Net change in cash                                         -             -   
Cash at beginning of year                                     1             1 
                                                        -------       ------- 
Cash at end of second quarter                        $        1    $        1 
                                                        =======       ======= 

The accompanying notes to consolidated financial statements are an integral 
part of these financial statements.
                                       4
<PAGE> 
                              B.B. WALKER COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 1 
------ 
A summary of the Company's significant accounting policies is presented on 
page 10 of its 1996 Annual Report to Shareholders.  Users of financial 
information presented for interim periods are encouraged to refer to the 
footnotes contained in the Annual Report to Shareholders when reviewing 
interim financial results.

In the opinion of management, the accompanying unaudited consolidated 
financial statements contain all adjustments necessary for a fair presentation 
of the financial results of B.B. Walker Company and Subsidiary (the "Company") 
for the interim periods included.  All such adjustments are of a normal 
recurring nature.  The results of operations for the interim periods shown in 
this report are not necessarily indicative of the results to be expected for 
the fiscal year.

The Company's operations are reported on a fifty-two, fifty-three week fiscal 
year that ends on the Saturday closest to October 31.  The fiscal year that 
ends on November 1, 1997 will include fifty-two weeks of operations.  The 
fiscal year that ended on November 2, 1996 included fifty-three weeks of 
operations.  For fiscal 1996, the Company elected to include the one extra 
week in the first accounting period of the fiscal year.  Therefore, the 
results for the six months ended May 4, 1996 include twenty-seven weeks of 
operations for the Company compared to twenty-six weeks for the six months 
ended May 3, 1997.  The results for the second quarter of fiscal 1997 and 1996 
each include thirteen weeks of operations.
 
 
Note 2 
------ 
Earnings per common share is computed by deducting preferred dividends from 
net income to determine net income attributable to common shareholders.  This 
amount is divided by the weighted average number of common shares outstanding 
during the quarter plus the common stock equivalents arising from stock 
options.  For primary earnings per share, the common stock equivalents are 
calculated using the average of the high and low asked price for the period.  
For fully diluted earnings per share, the common stock equivalents are 
calculated using the asked price at the end of the period if greater than the 
average asked price for the period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       5
<PAGE> 
                              B.B. WALKER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
 
 
Note 3 
------ 
Long-term obligations consist of the following amounts (in thousands):

                                               (Unaudited)
                                                  May 3,         November 2, 
                                                   1997             1996 
                                               -----------       ----------- 
Notes payable to banks                         $    2,542        $    2,690 
Notes payable to governmental authorities             632               654 
Promissory notes payable to shareholders            1,040             1,162 
Capital lease obligations                              37                84 
                                                  -------           ------- 
                                                    4,251             4,590 
Less portion payable within one year                1,144             1,304 
                                                  -------           ------- 
                                               $    3,107        $    3,286 
                                                  =======           ======= 
 
 
Note 4 
------ 
Inventories are composed of the following amounts (in thousands):

                                               (Unaudited)
                                                  May 3,         November 2, 
                                                   1997             1996 
                                               -----------       ----------- 

     Finished goods                            $    6,159        $    6,943 
     Work in process                                  591               692 
     Raw materials and supplies                     3,451             4,876 
                                                  -------           ------- 
                                               $   10,201        $   12,511 
                                                  =======           ======= 

















                                       6
<PAGE> 
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
Results of Operations
---------------------
The following summarizes the results of operations for the Company for the 
second quarters and six months ended May 3, 1997 and May 4, 1996:

                                           Second                  Six
                                        Quarter Ended         Months Ended
                                      May 3,    May 4,      May 3,    May 4,
                                       1997      1996        1997      1996
                                     --------  --------    --------  --------
    Net sales                         100.0%    100.0%      100.0%    100.0% 
    Cost of products sold              74.1%     77.8%       74.3%     76.7% 
                                      ------    ------      ------    ------ 
      Gross margin                     25.9%     22.2%       25.7%     23.3% 

    Selling and administrative 
      expenses                         21.3%     27.4%       22.0%     26.2% 
    Depreciation and amortization       1.4%      1.8%        1.5%      1.7% 
    Interest expense                    3.6%      3.9%        4.0%      4.2% 
    Interest and other income           (.2%)     (.2%)       (.3%)     (.2%)
                                      ------    ------      ------    ------ 
      Loss before income taxes 
        and minority interest           (.2%)   (10.7%)      (1.5%)    (8.6%)

    Provision for income taxes           .1%     (3.7%)       (.5%)    (2.9%)
    Minority interest                    -         -           -         -   
                                      ------    ------      ------    ------ 
      Net loss                          (.3%)    (7.0%)      (1.0%)    (5.7%)
                                      ======    ======      ======    ====== 


MATERIAL CHANGES IN OPERATIONS
------------------------------
During the first six months of fiscal 1997, the Company implemented many of 
the improvements identified at the end of the fourth quarter of the prior 
fiscal year.  Among these changes was the consolidation of the separate 
western and work/outdoor sales forces into a single unit capable of marketing 
all of the Company's branded product offerings.  In the first six months, each 
branded style has been evaluated to determine its overall contribution to the 
line.  The line was pared significantly with most of the changes affecting 
work/outdoor styles.  Some new styles were developed to provide a well-focused 
line of western and work footwear for the sales force to market to customers.  
The resulting branded product line is leaner and should require less of an 
investment in both finished goods and raw materials.

The Company has also made other operational changes to support the 
repositioning of the product lines.  Continued internal focus on 
manufacturing, marketing and administrative operations remains a priority for 
management.  Careful control of these expenses is imperative for returning the 
Company to profitability.  The efficient use of manufacturing capacity is one 
area that holds strong potential for improving the Company's operations.  
Management is examining its options related to current manufacturing 
operations to maximize use of manufacturing capacity.

                                       7
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued

The assumptions underlying management's plans are contingent on the Company 
achieving sales operating income gaols.  Management is continually evaluating 
the progress of the improvements to operations in achieving profitability and 
cash flow projections.   If market conditions remain soft and progress towards
corporate goals is not satisfactory, further material changes and reductions 
will be required.  If unforeseen problems occur, there can be no assurances 
as to when the Company will return to a profitable level of operations.


NET SALES
---------
Net sales in the second quarter of 1997 were $8,099,000, a decrease of 10.5% 
from net sales of $9,046,000 in the second quarter of 1996.  For the six 
months ended May 3, 1997, net sales were $16,388,000, or 14.1% lower, as 
compared to $19,066,000 for the same period in 1996.  Sales in the first six 
months of 1997 were lower than the prior year as the Company implemented 
several operational changes related to the repositioning of its product lines.  
A significant change involved the merger of the separate sales forces for 
work/outdoor boots and western boots into a single sales force.  The merged 
sales force is marketing both work/outdoor boots and western boots to 
customers within their territory.  During the first quarter, territorial 
boundaries for the merged sales force were established and the salesmen 
received extensive training on marketing both lines of footwear.  As a result 
of this transition, salesmen had to develop relationships with customers that 
they may not have previously served.  This transition carried into the second 
quarter.  Extensive resources and time were devoted to establishing the 
salesmen in their new territories in order to minimize the disruption to the 
Company's business.  However, orders for footwear were impacted as the plan 
was implemented.

In the second quarter, sales of branded footwear were down $1,100,000 (18.5%)
from 1996's level.  For the six months ended May 3, 1997, branded sales were
down $2,900,000 (26.0%) from the comparable period a year ago.  The decrease 
is attributed to a decrease in volume of pairs shipped.  Consolidation of the
sales force was the primary reason for the decrease in orders as discussed 
above.  In addition, with the elimination of numerous styles, primarily in the
work/outdoor line, the Company anticipated a lower sales volume from its 
branded styles.  The styles that were eliminated generated sales volume in the
prior year but did not provide adequate margins to support their inclusion in 
the product line.  Finally, sales of western styles remained soft in many 
territories.  The price per pair in the second quarter remained flat when 
compared to 1996 while the six months showed an improvement of 4.1% over the 
prior year.

Private label sales for the six months and second quarter were up $192,000 
(4.8%) and $265,000 (15.0%), respectively.  The increase came primarily from an 
increase in the volume of pairs shipped to customers of work and safety styles 
of footwear.  The price per pair remained fairly comparable to the prior year 
for both the six month period and the second quarter.

                                       8
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued

Other sales, which consists primarily of sales from the Company's retail 
outlets and sales to institutional customers, increased 3.1% in the first six 
months of 1997 over the same period in 1996.  For the comparable second 
quarters, 1997 sales were 5.9% lower than 1996 sales.  Lower sales in the 
Company's retail outlets accounted for most of the difference as the Company 
closed its retail outlet in Myrtle Beach, SC at the end of the first quarter.  
Sales to institutional customers increased 11.1% from 1996 levels as the 
Company accepted more of this business to provide production volume for its 
plants.


GROSS MARGIN
------------
The Company's gross margin rose to 25.7% for the first six months of 1997 from 
23.3% for the first six months of 1996.  For the second quarter of 1997 and 
1996, the gross margin was 25.9% and 22.2%, respectively.  The increase can be 
attributed to higher margins generated by a better product mix and cost 
reduction efforts.  The Company eliminated many styles that did not generate 
acceptable margins from the product line.  The Company's gross margin 
percentage continues to be impacted by the necessity to compete with 
discounting programs and aggressive dating terms in order to induce orders and 
maintain market share, as well as volume variances related to manufacturing 
and lower than anticipated production levels in the plant.


SELLING AND ADMINISTRATIVE EXPENSES
-----------------------------------
Selling and administrative expenses in the second quarter of 1997 were 
$1,722,000 as compared to $2,480,000 for the second quarter of 1996, a 
decrease of $758,000 or 30.6%.  For the six months ended May 3, 1997 and May 
4, 1996, selling and administrative expenses were $3,602,000 and $4,993,000, 
respectively, or $1,391,000 (27.8%) lower in 1997.  Expenses are lower in all 
areas in 1997 when compared to 1996.  Operational changes related to the 
repositioning of the product lines have generated most of the decrease in 
expenses.  Salary and benefits were down approximately $414,000 and $847,000 
for the second quarter and six months, respectively.  To support a lower sales 
volume, management has lowered the selling and administrative headcount, 
primarily through the reduction of the Company's sales force and a realignment 
of responsibilities in administrative functions.  Travel and showroom expenses 
have fallen $67,000 for the second quarter and $117,000 for the six months 
from the comparable periods in 1996.  Reduction of the sales force has been 
the primary reason for the decrease.  In addition, management has been more 
selective about the trade shows that are attended.  Finally, advertising 
expenses have been reduced from the prior year by $296,000 for the six month 
period and $220,000 in the second quarter.  The Company has scaled back the 
magnitude of its advertising program in response to the lower sales volume.

                                       9
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued

INTEREST EXPENSE
----------------
Interest expense for the six months and the second quarter were down 
significantly from the prior year.  Interest expense for the first six months 
of fiscal 1997 was $654,000, a decrease of $140,000 from the same period in 
the prior year.  For the comparable second quarters, interest expense was 
$294,000, or $60,000 less than the prior year.  The decrease can be attributed 
to a lower average outstanding balance on the revolving credit line in 1997 
versus 1996.  For the six month period, the average outstanding balance on the 
revolving credit line was $3,032,000 less than the prior year.  The second 
quarter saw a lower average outstanding balance of $3,183,000.  The interest 
rate on this debt rose to 10.25% from 10% during the second quarter.


DEPRECIATION AND AMORTIZATION
-----------------------------
Depreciation and amortization was $239,000 in 1997 as compared to $326,000 in 
1996 for the first six months of the year.  For the second quarter, 
depreciation expense was $114,000 in 1997 compared to $164,000 in 1996.  The 
Company continues to invest in capital assets only as necessary to maintain 
the current level of operations.  With the low level of capital expenditures 
made in recent years, depreciation charges on fixed assets that are becoming 
fully depreciated are not being replaced, resulting in lower depreciation 
expense.


PROVISION FOR INCOME TAXES
--------------------------
The Company has reported income tax expense of $10,000 for the second quarter 
ended May 3, 1997 compared to an income tax recovery of $335,000 for the 
second quarter of 1996.  The Company recorded income tax expense in the second 
quarter due to adjustments made to the valuation allowance for its deferred 
tax assets.  For the six months, the Company had an income tax recovery of 
$80,000 in 1997 and income tax recovery of $554,000 in 1996.  Income tax rates 
have been consistent between 1997 and 1996.


NET INCOME
----------
The Company reported a net loss of $27,000 for the second quarter and a net 
loss of $163,000 for the six months ended May 3, 1997.  For the comparable 
periods of 1996, the Company had a net loss of $636,000 for the second quarter 
and a net loss of $1,085,000 for the six months.  Better gross margins and 
reduced selling, general and administrative expenses combined to improve 
operating results for the Company.  In addition, reductions in outstanding 
debt have lowered interest costs.

                                      10
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Historically, the Company has funded substantially all of its working capital 
and capital expenditure requirements through borrowings under its finance 
agreement and other indebtedness.  The revolving finance agreement provides 
flexibility to the Company as the availability of funds fluctuates with the 
seasonal needs of the Company.  Generally, the Company's working capital needs 
are highest in the fourth fiscal quarter and lowest in the first fiscal 
quarter.  The Company continues to rely on the revolving finance agreement to 
provide working capital for its day-to-day operations.  With its revolving 
finance agreement, the Company finances its accounts receivable and 
inventories, paying interest at a variable rate (prime plus 1.75%, or 10.25%, 
at May 3, 1997).

By agreement of the Company's bank, certain restrictive covenants under the 
revolving finance agreement were amended for the period ended November 2, 1996 
and thereafter.  The Company and its bank entered into a fourth amendment to 
its finance agreement on March 14, 1997.  Under the terms of the amendment, 
which addresses the Company's projections and plans for fiscal 1997, the 
amount committed under the revolving credit agreement was reduced from 
$13,000,000 to $8,000,000 as of the date of the agreement.  In addition, the 
inventory sublimit was reduced to $4,000,000 and the advance rate against 
eligible accounts receivable was dropped to 80% from 85%.

As a condition to providing the financing, the bank requires that the Company 
meet various restrictive covenants.  These covenants include, among other 
things, maintenance of certain financial ratios, limits on capital 
expenditures, minimum net worth and net income requirements and restrictions 
on the amount of borrowings from stockholders.

All borrowings under the agreement are secured by all accounts receivable, 
inventories, machinery and equipment of the Company.  In addition, the bank 
has a first lien on the Asheboro land and facilities and a subordinated lien 
on the Somerset facilities.

The Company had approximately $697,000 of unused availability under the 
agreement at May 3, 1997.  The Company believes that its revolving finance 
agreement, as amended, will provide the necessary liquidity to fund its 
current level of operations.

The Company has not made any outlays for capital equipment during the first 
six months of 1997.  Capital expenditures for the first six months of 1996 
were $15,000.  The Company is making capital expenditures only to maintain 
current levels of operations.

                                      11
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued


FINANCIAL CONDITION

ACCOUNTS RECEIVABLE
-------------------
Accounts receivable were $7,983,000 at May 3, 1997, or $2,825,000 less than 
accounts receivable of $10,808,000 at November 2, 1996.  Trade receivables 
have historically been at their highest point at the end of the fiscal year 
because of the heavy sales volume related to Christmas buying by retailers.  
Second, certain dating programs offered by the Company begin in the third 
quarter and end in the first quarter of the following fiscal year.  Accounts 
receivables related to these programs are outstanding at the end of the fiscal 
year but do not impact accounts receivable in the second quarter.


INVENTORIES
-----------
Inventories were $10,201,000 at May 3, 1997 and $12,511,000 at November 2, 
1996, a difference of $2,310,000.  Of the decrease, approximately $784,000 is 
finished goods, $101,000 is work in process, and $1,425,000 is raw materials.  
The decrease is a result of the reduced production schedules in the Company's 
plants and greater emphasis on managing inventories.  Sales are historically 
at their highest point in the fourth quarter of each year.


BORROWINGS UNDER FINANCE AGREEMENT
----------------------------------
The balance outstanding under the finance agreement was $7,152,000 at May 3, 
1997 compared to $11,464,000 at November 2, 1996, a decrease of $4,312,000.  
Negotiated decreases in the revolving line of credit combined with planned 
reductions in accounts receivable and inventories contributed to the reduction 
in outstanding amounts.


FORWARD-LOOKING STATEMENTS
--------------------------
The foregoing discussion contains some forward-looking statements about the 
Company's financial condition and results of operations, which are subject to 
certain risks and uncertainties that could cause actual results to differ 
materially from those reflected in the forward-looking statements.  Readers 
are cautioned not to place undue reliance on these forward-looking statements, 
which reflect management's judgment only as of the date hereof.  The Company 
undertakes no obligation to publicly revise these forward-looking statements 
to reflect events and circumstances that arise after the date hereof.

Factors that might cause actual results to differ materially from these 
forward-looking statements include (1) the effects of general economic 
conditions, (2) the impact of competitive products and pricing in the footwear 
industry, (3) failure to achieve anticipated sales results, (4) management's 
ability to accurately predict the effect of cost reductions, and (5) 
management's ability to accurately predict the adequacy of the Company's 
financing arrangement to meet its working capital and capital expenditure 
requirements.

                                      12
<PAGE>
                              B.B. WALKER COMPANY
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued


PART II.  OTHER INFORMATION
---------------------------

Item 2.  Changes in Securities

         Effective March 14, 1997, the Company executed an amendment to its 
         financing agreement which established new financial covenants for the 
         agreement, as well as modifying key provisions of the agreement.


Item 4.  Submission of Matters to a Vote of Security Holders

         The Forty-Sixth Annual Meeting of the Shareholders of the Company was 
         held on Monday, March 17, 1997, as set forth in the Notice of Annual 
         Meeting of Shareholders dated and mailed on February 24, 1997.  Of 
         the 1,726,534 shares of common stock issued and outstanding on the 
         record date, 1,377,252 shares or 79.77% of the common stock 
         outstanding were represented in person or by proxy at the meeting.  
         For the issues presented to the shareholders for their consideration, 
         the results were as follows:

         1 - The Board of Directors, in accord with the By-laws, established 
             the number of Directors at six.  The shareholders elected the six 
             persons nominated by them in the proxy statement mailed February 
             24, 1997.  All director nominees had served as directors during 
             the prior year and all were elected by the shareholders.  There 
             were no other nominations for director presented at the meeting.  
             The six nominees were elected with results as follows:

                                   Shares      Shares       Shares Marked
      Director                       For       Against    Withhold Authority
      --------                    ---------    -------    ------------------
      Kent Anderson               1,224,307    144,390          8,555
      George M. Ball              1,224,397    144,300          8,555
      Robert L. Donnell, Jr.      1,224,703    143,994          8,555
      James P. McDermott          1,224,757    143,940          8,555
      Michael C. Miller           1,368,295        402          8,555
      Edna A. Walker              1,366,301        372         10,579


       2 - Ratification by the Shareholders of the action by the Board of 
           Directors to appoint Price Waterhouse LLP as the Company's 
           independent certified public accounting firm for the 1997 fiscal 
           year.  The action was ratified with 1,371,985 shares voting for, 
           1,146 shares voting against, and 4,121 abstaining from the vote.




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<PAGE>


PART II.  OTHER INFORMATION, Continued
--------------------------------------

Item 6.  Exhibits and Reports on Form 8-K

        (a)  Exhibits Filed:

             (27)  Financial Data Schedule for the period ended May 3, 1997

        (b)  Reports on Form 8-K:

             NONE


                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                                             B.B. Walker Company


       Date  June 12, 1997                   /s/KENT T. ANDERSON 
             -------------                   -------------------------------
                                             Kent T. Anderson
                                             Chairman of the Board, Chief 
                                             Executive Officer and President




       Date  June 12, 1997                   /s/WILLIAM C. MASSIE 
             -------------                   -------------------------------
                                             William C. Massie
                                             Executive Vice President





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