<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 THIRD QUARTER ENDED AUGUST 2, 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 September 12, 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 AND SUBSIDIARY 
                          CONSOLIDATED BALANCE SHEETS 
                                (In Thousands) 
 
 
                                                    (Unaudited) 
                                                     August 2,     November 2, 
            Assets                                     1997           1996 
           --------                                 -----------    ----------- 
Cash                                                $        1     $        1  
Accounts receivable, less allowance for doubtful 
  accounts of $486 in 1997 and $742 in 1996              7,404         10,808  
Inventories                                              9,530         12,511  
Prepaid expenses                                           336            441  
Income tax recovery receivable                             229          1,042  
Deferred income tax benefit, current                      -               150  
                                                    -----------    ----------- 
    Total current assets                                17,500         24,953  
 
Property, plant and equipment, net of accumulated 
  depreciation and amortization of $6,150 in 1997 
  and $5,906 in 1996                                     1,856          2,208  
Other assets                                               176            214  
                                                    -----------    ----------- 
                                                    $   19,532     $   27,375  
                                                    ===========    =========== 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                   (Continued)
                                      1
<PAGE> 
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     CONSOLIDATED BALANCE SHEETS, Continued
                                (In Thousands) 
 
                                                    (Unaudited) 
                                                     August 2,     November 2, 
      Liabilities and Shareholders' Equity             1997           1996 
      ------------------------------------          -----------    ----------- 
 
Borrowings under finance agreement                  $    6,443     $   11,464  
Current portion of long-term obligations                 1,164          1,304  
Accounts payable, trade                                  3,416          4,984  
Accrued salaries, wages and bonuses                        542          1,102  
Other accounts payable and accrued liabilities             513            680  
                                                    -----------    ----------- 
    Total current liabilities                           12,078         19,534  
                                                    -----------    ----------- 
 
Long-term obligations, net of current portion            3,168          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                                       (171)           111  
  Shareholders' loans                                     (110)          (123) 
                                                    -----------    ----------- 
    Total shareholders' equity                           4,253          4,522  
                                                    -----------    ----------- 
                                                    $   19,532     $   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)  
                                                       Third Quarter Ended                 Nine Months Ended
                                                    --------------------------         --------------------------
                                                     August 2,      August 3,           August 2,      August 3, 
                                                       1997           1996                1997           1996    
                                                    -----------    -----------         -----------    -----------
<S>                                                 <C>            <C>                 <C>            <C>             
Net sales                                           $    6,902     $    8,539          $   23,290     $   27,605 
Interest and other income                                    7             11                  54             38 
                                                    -----------    -----------         -----------    -----------
    Total revenues                                       6,909          8,550              23,344         27,643 
                                                    -----------    -----------         -----------    -----------
 
Cost of products sold                                    5,062          6,502              17,244         21,120 
Selling and administrative expenses                      1,593          2,391               5,195          7,384 
Depreciation and amortization                              112            168                 351            494 
Interest expense                                           276            345                 930          1,139 
                                                    -----------    -----------         -----------    -----------
    Total costs and expenses                             7,043          9,406              23,720         30,137 
                                                    -----------    -----------         -----------    -----------
Loss before benefit from income taxes and 
  minority interest                                       (134)          (856)               (376)        (2,494)
 
Benefit from income taxes                                  (20)          (283)               (100)          (837)
Minority interest                                            1              1                   2              2 
                                                    -----------    -----------         -----------    -----------
 
    Net loss                                              (115)          (574)               (278)        (1,659)
 
Retained earnings (deficit)at beginning of period          (55)         3,070                 111          4,158 
Dividends on preferred stock                                (1)            (1)                 (4)            (4)
                                                    -----------    -----------         -----------    -----------
Retained earnings (deficit) at end of period        $     (171)    $    2,495          $     (171)    $    2,495 
                                                    ===========    ===========         ===========    ===========
Net loss per share: 
 
      Primary                                       $     (.07)    $     (.33)         $     (.16)    $     (.96)
                                                    ===========    ===========         ===========    ===========
      Fully diluted                                 $     (.07)    $     (.33)         $     (.16)    $     (.96)
                                                    ===========    ===========         ===========    ===========
Weighted average common shares outstanding:
 
      Primary                                            1,738          1,727               1,738          1,727 
                                                    ===========    ===========         ===========    ===========
      Fully diluted                                      1,738          1,727               1,738          1,727 
                                                    ===========    ===========         ===========    ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral 
part of these financial statements.
 
                                       3
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS 
                                (In Thousands) 
                                                           (Unaudited) 
                                                        Nine Months Ended 
                                                    -------------------------- 
                                                     August 2,      August 3, 
                                                       1997           1996 
                                                    -----------    ----------- 
Cash Flows From Operating Activities: 
  Net loss                                          $     (278)    $   (1,659) 
  Adjustments to reconcile net loss to 
    net cash provided by operating activities: 
    Depreciation and amortization                          351            494  
    Gain on sale of property, plant and equipment          (26)            (6) 
    Deferred income taxes                                  150            -    
    (Increase) decrease in: 
      Accounts receivable, net                           3,404          2,124  
      Inventories                                        2,981          2,798  
      Prepaid expenses                                     105            144  
      Other assets                                          38             84  
    Increase (decrease) in: 
      Accounts payable, trade                           (1,568)          (263) 
      Accrued salaries, wages and bonuses                 (560)          (280) 
      Other accounts payable and accrued liabilities      (167)           779  
      Income taxes                                         813            (31) 
                                                    -----------    ----------- 
  Net cash provided by operating activities              5,243          4,184  
                                                    -----------    ----------- 
Cash Flows From Investing Activities: 
  Capital expenditures                                    -               (21) 
  Proceeds from disposal of property, plant 
    and equipment                                           26              6  
                                                    -----------    ----------- 
  Net cash provided by (used for)
    investing activities                                    26            (15) 
                                                    -----------    ----------- 
Cash Flows From Financing Activities: 
  Net borrowing under finance agreement                 (5,021)        (3,614) 
  Proceeds from issuance of long-term obligations          198             45  
  Payment on long-term obligations                        (455)          (607) 
  Purchase of stock from minority interest                 -               (1) 
  Loans to shareholders, net of repayments                  13             12  
  Dividends paid on 7% cumulative preferred stock           (4)            (4) 
                                                    -----------    ----------- 
  Net cash used for financing activities                (5,269)        (4,169) 
                                                    -----------    ----------- 
Net change in cash                                         -              -    
Cash at beginning of year                                    1              1  
                                                    -----------    ----------- 
Cash at end of third quarter                        $        1     $        1  
                                                    ===========    =========== 

The accompanying notes to consolidated financial statements are an integral 
part of these financial statements. 
                                       4
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                   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 nine months ended August 3, 1996 include forty weeks of 
operations for the Company.  The comparative nine month results for the period 
ended August 2, 1997 reflect thirty-nine weeks of operations for the Company.  
The results for the comparative third quarters of 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.

In February 1997, the Financial Accounting Standards Board ("FASB") issued 
Statement of Financial Accounting Standards No. 128, "Earnings per Share" 
("FAS 128"), which replaces the presentation of primary and fully diluted 
earnings per share ("EPS") with basic and diluted EPS, respectively.  FAS 128 
simplifies the standards for computing earnings per share and makes them 
comparable to international EPS standards.  It also requires dual presentation 
of basic and diluted EPS on the face of the income statement for all entities 
with complex capital structures and requires a reconciliation of the numerator 
and denominator of the basic EPS computation to the numerator and denominator 
of the diluted EPS computation  

                                      5
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
              Notes To Consolidated Financial Statements, Continued 
 
 
This Statement is effective for the Company in fiscal 1999.  Pro forma basic 
and diluted EPS were both $.07 and $.33 for the third quarters ended August 2, 
1997 and August 3, 1996, respectively.  For the nine months ended August 2, 
1997 and August 3, 1996, pro forma basic and diluted EPS were $.16 and $.96, 
respectively.


NOTE 3 
------ 
Long-term obligations consist of the following amounts (in thousands): 
 
                                                  (Unaudited) 
                                                   August 2,     November 2, 
                                                     1997           1996 
                                                  -----------    ----------- 
   Notes payable to banks                         $    2,540          2,690  
   Notes payable to governmental authorities             621            654  
   Promissory notes payable to shareholders            1,151          1,162  
   Capital lease obligations                              20             84  
                                                  -----------    ----------- 
                                                       4,332          4,590  
   Less portion payable within one year                1,164          1,304  
                                                  -----------    ----------- 
                                                  $    3,168          3,286  
                                                  ===========    =========== 
 
 
NOTE 4
------
Inventories are composed of the following amounts (in thousands): 

                                                  (Unaudited) 
                                                   August 2,     November 2, 
                                                     1997           1996 
                                                  -----------    ----------- 
      Finished goods                              $    5,757          6,943  
      Work in process                                    641            692  
      Raw materials and supplies                       3,132          4,876  
                                                  -----------    ----------- 
                                                  $    9,530         12,511  
                                                  ===========    =========== 
 
 
 
 
 
 
 
 
 
 
 
                                       6
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     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 
third quarters and nine months ended August 2, 1997 and August 3, 1996:
 
                                           Third                  Nine 
                                       Quarter Ended          Months Ended 
                                    -------------------   ------------------- 
                                    August 2, August 3,   August 2, August 3, 
                                      1997      1996        1997      1996    
                                    --------- ---------   --------- --------- 
Net sales                              100.0%    100.0%      100.0%    100.0% 
Cost of products sold                   73.3%     76.1%       74.0%     76.5% 
                                       ------    ------      ------    ------ 
    Gross margin                        26.7%     23.9%       26.0%     23.5% 
 
Selling and administrative  
  expenses                              23.1%     28.0%       22.3%     26.7% 
Depreciation and amortization            1.6%      2.0%        1.5%      1.8% 
Interest expense                         4.0%      4.0%        4.0%      4.1% 
Interest and other income                (.1%)     (.1%)       (.2%)     (.1%)
                                       ------    ------      ------    ------ 
    Loss before income taxes 
      and minority interest             (1.9%)   (10.0%)      (1.6%)    (9.0%)
 
Benefit from income taxes                (.3%)    (3.3%)       (.4%)    (3.0%)
Minority interest                         -         -           -         -   
                                       ------    ------      ------    ------ 
    Net loss                            (1.6%)    (6.7%)      (1.2%)    (6.0%)
                                       ======    ======      ======    ====== 
 
 
MATERIAL CHANGES IN OPERATIONS
------------------------------
During the first nine months of fiscal 1997, the Company implemented a wide 
range of operational changes directed at reducing expenses and making the 
Company more competitive in the markets it serves.  Among these changes was 
the consolidation of the separate western and work/outdoor sales forces into a 
single unit capable of marketing the entire line of branded product offerings.  
In addition, the branded line of styles, particularly work and outdoor styles, 
has been pared significantly.  The line remaining after these adjustments is 
leaner and requires less of an investment in both finished goods and raw 
materials.

The Company has also implemented other operational changes to support the 
repositioning of the product lines.  Control and reduction of manufacturing, 
marketing and administrative expenses remains a priority for management.  In 
order to achieve further cost savings, the Company is evaluating several key 
internal functions and redesigning their structure to provide for a more 
efficient operation.

                                      7
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     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 and operating income goals.  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.


NET SALES
---------
Net sales in the third quarter ended August 2, 1997 were $6,902,000 which was 
$1,637,000 (19.2%) lower than net sales of $8,539,000 in the third quarter 
ended August 3, 1996.  For the nine months ended August 2, 1997, net sales 
were $23,290,000, or $4,315,000 (11.6%) lower, as compared to $27,605,000 for 
the same period in 1996.  

Branded footwear sales were down $1,181,000 (21.5%) in the third quarter of 
1997 when compared to the same period for the prior year.  Year-to-date, 
branded sales are $4,116,000 (22.3%) lower than prior year sales.  For the 
third quarter, pairs shipped are down 22.5% while the price per pair rose 
slightly.  For the nine month period, pairs shipped were down 25.0% and the 
price per pair was up marginally over the prior year.

Sales in the third quarter and the first nine months of 1997 were impacted by 
several factors.  First, a significant change involved the merger of the two 
separate sales forces for work/outdoor boots and western boots, respectively, 
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 
and orders for footwear were impacted as the plan was implemented.

Second, the Company has repositioned its product lines to direct its limited 
resources towards promoting styles that will generate acceptable returns for 
the Company.  Part of this process involved eliminating various styles from 
the branded line.  A significant number of the styles closed out of the line 
were work/outdoor styles.  These styles generated sales volume in the prior 
year but did not provide adequate margins to support their inclusion in the 
product line.

Finally, branded sales have also been impacted by a weak retail sector, 
particularly in western markets.  Demand at the retail level for western boots 
remains soft and orders have been lower than the prior year.

Private label sales for the third quarter and nine month period are down 
$514,000 (27.3%) and $323,000 (5.5%), respectively.  Pairs shipped were down 
29.0% and 7.6% in the third quarter and nine months, respectively.  The 
results of this division reflect the activity of several large accounts and is 
determined by the timing of shipments.  Year-to-date results reflect an 
overall slowdown in pairs shipped which is a result of a soft retail sector.

                                      8
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     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 3.8% in the first nine 
months of 1997 over the same period in 1996.  For the comparable third 
quarters, 1997 sales were 5.1% higher than 1996 sales.  The Company reported 
lower sales in its retail division due to the closing of its retail outlet in 
Myrtle Beach, SC at the end of the first quarter.  However, the impact of the 
closed retail outlet has been partially offset by stronger sales in the 
Company's two remaining retail stores.  Sales to institutional customers 
increased significantly from 1996 levels as the Company accepted more of this 
business to provide production volume for its plants.


GROSS MARGIN
------------
For the first nine months of 1997, the Company's gross margin was 26.0%, an 
increase of 2.5% over the gross margin of 23.5% for the comparable period in 
1996.  For the third quarter of 1997 compared to 1996, the gross margin 
increased to 26.7% from 23.9%.  The increase can be attributed to higher 
margins generated by a better product mix and cost reduction efforts.  In the 
repositioning of the Company's product lines, many styles that were not 
generating acceptable turns were closed out of the line. In addition, a lower 
rate of returned goods in relation to gross sales as well as better 
productivity from manufacturing personnel and reduction in manufacturing costs 
has contributed to the improvement.  However, the Company's gross margin 
continues to be impacted by the necessity to use discounting programs and 
aggressive dating terms in order to induce orders and maintain market share.


SELLING AND ADMINISTRATIVE EXPENSES
-----------------------------------
Selling and administrative expenses were $1,593,000 for the third quarter of 
1997 as compared to $2,391,000 for the third quarter of 1996, a decrease of 
$798,000 (33.4%).  For the nine months ended August 2, 1997 and August 3, 
1996, selling and administrative expenses were $5,195,000 and $7,384,000, 
respectively, or $2,189,000 (29.6%) lower in 1997.  Expenses in most areas 
were lower in 1997 than in 1996.  Adjustments to operations, including the 
consolidation of the separate work/outdoor and western sales forces, have 
generated most of the decrease.  In addition, management has lowered the 
general and administrative headcount and realigned significant 
responsibilities in the administrative functions.  Due to these changes, 
salary and benefits expense for the nine months was $1,243,000 lower in 1997 
when compared to 1996.  For the third quarter, the decrease was $396,000.  
Similarly, with a smaller sales force, travel and showroom expenses have been 
cut in 1997 when compared to 1996.  For the nine month period, travel and 
showroom expenses were $150,000 lower and in the third quarter, these expenses 
were $33,000 lower.  Advertising expenses have been reduced from the prior 
year by $442,000 for the nine month period and $145,000 in the third quarter.  
In response to the lower sales volume, the Company has reduced expenditures in 
this area.



                                      9
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     Management's Discussion and Analysis of 
             Results of Operations and Financial Condition, Continued
 
INTEREST EXPENSE
----------------
Interest expense for the nine months and the third quarter were down 
significantly from the prior year.  Interest expense for the nine months ended 
August 2, 1997 was $930,000, or $209,000 (18.3%) lower than interest expense 
of $1,139,000 for the nine months ended August 3, 1996.  For the third 
quarter, 1997 expense was $276,000, or $69,000 (20.0%) lower than 1996 expense 
of $345,000.  The decrease for the nine month period and in the third quarter 
can be attributed to the lower average balances on outstanding debt, mainly 
the revolving credit line.  Average outstanding advances in 1997 under the 
revolving credit line were approximately $3,200,000 lower in the nine month 
period and $3,400,000 lower in the third quarter than in 1996.  Interest rates 
for this agreement ranged from 10% to 10.25% in 1997 and from 8.75% to 9.25% 
in 1996.


DEPRECIATION AND AMORTIZATION
-----------------------------
For the first nine months of 1997, depreciation and amortization fell $143,000 
to $351,000 from $494,000 in 1996.  For the third quarter, depreciation and 
amortization expense was $112,000 in 1997 and $168,000 in 1996, a decrease of 
$56,000.  Depreciation and amortization expense has remained fairly level as 
the Company is investing in capital assets only as necessary to maintain its 
current level of operations.  With minimal amounts invested in fixed assets in 
recent years, depreciation charges on fixed assets that are becoming fully 
depreciated are not being replaced, resulting in lower depreciation expense.


BENEFIT FROM INCOME TAXES
-------------------------
For the nine months and third quarter ended August 2, 1997, the Company 
recorded a benefit from income taxes of $100,000 and $20,000, respectively.  
For the comparable periods of 1996, the Company had a benefit from income 
taxes of $837,000 and $283,000, respectively.  With losses accumulated in 
1997, the Company has fully utilized its carryback to prior periods.  Income 
tax rates applied have been consistent between 1997 and 1996.


NET LOSS
--------
The Company reported a net loss of $115,000 for the third quarter and a net 
loss of $278,000 for the nine months ended August 2, 1997.  For the comparable 
periods of 1996, the Company had a net loss of $574,000 for the third quarter 
and a net loss of $1,659,000 for the nine 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 AND SUBSIDIARY 
                     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 August 2, 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.

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 $177,000 of unused availability under the 
agreement at August 2, 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 
nine months of 1997.  Capital expenditures for the first nine months of 1996 
were $21,000.  The Company is making capital expenditures only to maintain 
current levels of operations.








                                      11
<PAGE>
                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     Management's Discussion and Analysis of 
             Results of Operations and Financial Condition, Continued
 
 
FINANCIAL CONDITION

ACCOUNTS RECEIVABLE
-------------------
Accounts receivable were $7,404,000 at August 2, 1997 compared to $10,808,000 
at November 2, 1996, a decrease of $3,404,000.  Trade receivables have 
historically been at their highest point at the end of the fourth quarter 
because of the heavy sales volume related to Christmas buying by retailers.  
Second, lower sales volume and increased collection efforts have contributed 
to the decrease.


INVENTORIES
-----------
Inventories were $9,530,000 at August 2, 1997, a decrease of $2,981,000 from 
the inventories held at November 2, 1996 of $12,511,000.  Of the decrease, 
approximately $1,186,000 is finished goods, $51,000 is work in process, and 
$1,744,000 is raw materials.  The lower balance is a result of the Company 
focusing on managing inventory turns, both finished goods and raw materials, 
in order to reduce the investment in inventories.  In addition, the investment 
in inventory has been decreased as fewer styles are now being carried in 
finished goods and emphasis has been placed on selling closeouts.  Finally, 
with fewer styles in the product lines as discussed above, raw material 
inventories include fewer varieties of components.


BORROWINGS UNDER FINANCE AGREEMENT
----------------------------------
The balance outstanding under the finance agreement was $6,443,000 at August 
2, 1997 compared to $11,464,000 at November 2, 1996.  Negotiated decreases in 
the revolving line of credit combined with planned reductions in accounts 
receivable and inventories contributed to the reduction in the outstanding 
balance.


NEW ACCOUNTING STANDARDS
------------------------
In June 1997, the Financial Accounting Standards Board ("FASB") issued 
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive 
Income".  This Statement requires that changes in the amounts of comprehensive 
income items, which are currently reported as separate components of equity, 
be shown in a financial statement, displayed as prominently as other financial 
statements.  The common components of other comprehensive income would include 
foreign currency translation adjustments, minimum pension liability 
adjustments and/or unrealized gains or losses on available-for-sale 
securities.  The Statement does not require a specific format for the 
financial statement in which comprehensive income is reported, but does 
require that an amount representing total comprehensive income be reported in 
that statement.


                                      12
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                       B.B. WALKER COMPANY AND SUBSIDIARY 
                     Management's Discussion and Analysis of 
             Results of Operations and Financial Condition, Continued
 
This Statement is effective for the Company in fiscal 1999; however, 
management has not yet completed its assessment of the manner in which 
comprehensive income might be displayed.

In June 1997, the FASB issued FAS 131, "Disclosures About Segments of an 
Enterprise and Related Information".  This Statement will change the way the 
Company reports information about segments of their business in their annual 
financial statements and require the Company to report selected segment 
information in their quarterly reports issued to shareholders.  It also 
requires entity-wide disclosures about the products and services an entity 
provides, the material countries in which it holds assets and reports 
revenues, and its major customers.  The Statement requires the Company 
disclose segment data based on how management makes decisions about allocating 
resources to segments and measuring their performance.

This Statement is effective for the Company in fiscal 1999; however, 
management has not yet completed its assessment of how this Statement impacts 
existing segment disclosure.


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.
 
 
 
 
 
 
 
 
 
 
 
 
 
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PART II.     OTHER INFORMATION

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K 
------       -------------------------------- 
(a)   Exhibits Filed:

      (27) Financial Data Schedule for the Third Quarter ended August 2, 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  September 16, 1997        /s/KENT T. ANDERSON 
           ------------------        ------------------- 
                                     Kent T. Anderson 
                                     Chairman of the Board, Chief 
                                     Executive Officer and President 




     Date  September 16, 1997        /s/ JOHN R. WHITENER 
           ------------------        -------------------- 
                                     John R. Whitener
                                     Controller
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       14
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