8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: May 11, 2006

Date of Earliest Event Reported: May 11, 2006

The Pep Boys - Manny, Moe & Jack

(Exact name of registrant as specified in charter)

Pennsylvania	1-3381	23-0962915
(State or other jurisdiction of	(Commission	(I.R.S. Employer ID number)
incorporation or organization)	File No.)
3111 W. Allegheny Ave. Philadelphia, PA			19132
(Address of principal executive offices)			(Zip code)

215-430-9000(Registrant’s telephone number, including area code)

Not Applicable(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

On May 11, 2006, the Company issued a press release announcing its earnings for the fiscal quarter ended April 29, 2006.

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits

(c) Exhibits. The following exhibits are filed with this report:

Exhibit No. 99.1  Press release dated May 11, 2006.

Exhibit No. 99.2  Unaudited supplemental financial data.

2

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 hereunto duly authorized.

	THE PEP BOYS - MANNY, MOE & JACK
	By:	/s/ Harry F. Yanowitz
		Harry F. Yanowitz
		Senior Vice President and
		Chief Financial Officer
Date:  May 11, 2006

3

EX-99.1

Exhibit 99.1

Pep Boys Reports 0.9% Q1 Comparable Sales Decrease
- Improved Operating Profit and Positive Service Center Comps -

PHILADELPHIA – May 11, 2006 - The Pep Boys - Manny, Moe & Jack (NYSE: “PBY”), the nation’s leading automotive aftermarket retail and service chain, announced the following results for the thirteen weeks ended April 29, 2006.

Operating Results

Sales

Sales for the thirteen weeks ended April 29, 2006 were $555,929,000, 1.3% less than the $563,514,000 recorded last year. Comparable Sales decreased 0.9%, including a 1.0% comparable merchandise sales decrease and a 0.6% comparable service revenue decrease. In accordance with GAAP, merchandise sales includes merchandise sold through both our retail and service center lines of business and service revenue is limited to labor sales. Recategorizing Sales into the respective lines of business from which they are generated, comparable Retail Sales (DIY and Commercial) decreased 3.0% and comparable Service Center Revenue (labor plus installed merchandise and tires) increased 2.2%.

Earnings

Net Loss from Continuing Operations Before Cumulative Effect of Change in Accounting Principle improved from a Net Loss of $2,468,000 (($0.04) per share - basic and diluted) to a Net Loss of $922,000 (($0.02) per share - basic and dil uted).

Commentary

“The Pep Boys team continues to make steady progress against the significant operating challenges we faced last year. Our first quarter operating profit increased from $3.2 million to $7.2 million year over year,” said CEO Larry Stevenson.

“In particular, as our field team has stabilized se rvice center operations, we were able to report a substantial sequential improvement – not just the service center sales improvement we reported in Q4, but also an improvement from Q3 and Q4 last year in bottom line contribution.”

Mr. Stevenson continued, “In our retail operations, despite lower sales (due in part to the grand re-opening of the Los Angeles market this quarter last year) and higher depreciation expense, we achieved improved operating results through tight SG&A expense controls and improved product margins.”

Harry Yanowitz, CFO, commented, “During the quarter we improved our use of working capital, focusing on our most productive inventory, that resulted in an ending inventory balance slightly below this quarter last year. Operating results were helped through the settlement of a product liability legal reserve (approximately $2.3 million pre-tax) that reduced SG&A in this quarter. There were no material real estate gains or losses in Q1 this year or last year.”

Accounting Matters

Co-op Advertising

During fiscal 2005, a portion of our vendor support funds were provided in support of specific advertising costs or “co-op,” which, in accordance with EITF No. 02-16, we accounted for as a reduction of SG&A. We have completed the restructuring of substantially all of our vendor agreements to provide flexibility in how we use vendor support funds, to eliminate the administrative burden of tracking the application of such funds and to ensure that we are receiving the best possible pricing. In the first quarter of fiscal 2006, all of the allowances received from vendors were accounted for as a reduction of inventories and recognized as a reduction to cost of sales a s the related inventories are sold in accordance with EITF No. 02-16. Assuming that all of our vendor agreements had been so restructured as of January 30, 2005, both our SG&A and Gross Profit for the first quarter of fiscal 2005 would have increased by approximately $8.8 million, without materially impacting inventory valuation or Net Loss from Continuing Operations Before Cumulative Effect of Change in Accounting Principle.

Pep Boys Financial Highlights

Thirteen Weeks Ended:	April 29, 2006			April 30, 2005
Total Revenues	$	555,929,000		$	563,514,000
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	(922,000	)	$	(2,468,000	)
Average Shares – Basic and Diluted	54,224,000			55,185,000
Basic and Diluted Loss Per Share from Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	(0.02	)	$	(0.04	)

2

Pep Boys has 593 stores and more than 6,000 service bays in 36 states and Puerto Rico. Along with its vehicle repair and maintenance capabilities, the Company also serves the commercial auto parts delivery market and is one of the leading sellers of replacement tires in the United States. Customers can find the nearest location by calling 1-800 - -PEP-BOYS or by visiting pepboys.com.

Certain statements contained herein constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. The word “guidance,” “expect,” “anticipate,” “estimates,” “forecasts” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include management’s expectations regarding future financial performance, automotive aftermarket trends, levels of competition, business development activities, future capital expenditures, financing sources and availability and the effects of regulation and litigation. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. The Company’s actual results may differ materially from the results discussed in the forward-looking statements due to factors beyond the control of the Company, including the strength of the national and regional economies, retail and commercial consumers’ ability to spend, the health of the various sectors of the automotive aftermarket, the weather in geographical regions with a high concentration of the Company’s stores, competitive pricing, the location and number of competitors’ stores, product and labor costs and the additional factors described in the Company’s filings with the SEC. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Investors have an opportunity to listen to the Company’s quarterlyconference calls discussing its results and related matters. The call for the first quarter will be broadcast live on Friday, May 12 at 8:30 a.m. EST over the Internet at Broadcast Networks’ Vcall website, located at http://www.vcall.com. To listen to the call live, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Supplemental financial information will be available the morning of May 12 on Pep Boys’ website at www.pepboys.com.

###

Contact:

Pep Boys, Philadelphia
Investor Contact: Harry Yanowitz, 215-430-9720
Media Contact: Bill Furtkevic, 215-430-9676
Internet: http://www.pepboys.com

3

EX-99.2

Exhibit 99.2

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES		(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS	(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended
	April 29, 2006					April 30, 2005
				%					%
	Amount			Sales		Amount			Sales
Merchandise Sales	$	456,742		82.2		$	463,263		82.2
Service Revenue	99,187			17.8		100,251			17.8
Total Revenues	555,929			100.0		563,514			100.0
Costs of Merchandise Sales	329,583			72.2		341,318			73.7
Costs of Service Revenue	88,066			88.8		83,807			83.6
Total Costs of Revenues	417,649			75.1		425,125			75.4
Gross Profit from Merchandise Sales	127,159			27.8		121,945			26.3
Gross Profit from Service Revenue	11,121			11.2		16,444			16.4
Total Gross Profit	138,280			24.9		138,389			24.6
Selling, General and Administrative Expenses	131,093			23.6		135,161			24.0
Operating Profit	7,187			1.3		3,228			0.6
Non-operating Income	2,259			0.4		1,738			0.3
Interest Expense	10,337			1.9		8,915			1.6
Loss From Continuing Operations Before Income Tax Expense (Benefit) and Cumulative Effect of Change in Accounting Principle	(891		)	(0.2	)	(3,949		)	(0.7	)
Income Tax Expense (Benefit)	31			(3.5	)	(1,481		)	37.5
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	(922		)	(0.2	)	(2,468		)	(0.4	)
Loss From Discontinued Operations, Net of Tax	(48		)	—		(306		)	(0.1	)
Cumulative Effect of Change in Accounting Principle, Net of Tax	267			—		—			—
Net Loss	(703		)	(0.1	)	(2,774		)	(0.5	)
Retained Earnings, beginning of period	481,926					536,780
Cash Dividends	(3,705		)			(3,562		)
Effect of Stock Options	(66		)			(1,257		)
Dividend Reinvestment Plan	(14		)			(10		)
Retained Earnings, end of period	$	477,438				$	529,177
Basic and Diluted Loss per Share:
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	(0.02	)			$	(0.04	)
Discontinued Operations, Net of Tax	—					(0.01		)
Cumulative Effect of Change in Accounting Principle, Net of Tax	0.01					—
Basic and Diluted Loss per Share	$	(0.01	)			$	(0.05	)
Cash Dividends per Share	$	0.0675				$	0.0675

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED BALANCE SHEETS	(dollar amounts in thousands, except per share amounts)

	April 29, 2006			January 28, 2006			April 30, 2005
Assets
Current Assets:
Cash and cash equivalents	$	51,698		$	48,281		$	84,258
Accounts receivable, net	37,928			36,434			30,514
Merchandise inventories	618,650			616,292			619,712
Prepaid expenses	40,648			40,952			40,499
Other	72,049			85,446			88,083
Assets held for disposal	2,083			652			2,569
Total Current Assets	823,056			828,057			865,635
Property and Equipment - at cost:
Land	257,105			257,802			260,758
Buildings and improvements	917,007			916,580			913,697
Furniture, fixtures and equipment	667,145			671,189			618,466
Construction in progress	16,672			15,858			26,152
	1,857,929			1,861,429			1,819,073
Less accumulated depreciation and amortization	926,857			914,040			873,193
Property and Equipment - net	931,072			947,389			945,880
Other	46,471			46,307			65,041
Total Assets	$	1,800,599		$	1,821,753		$	1,876,556
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	256,740		$	261,940		$	333,424
Trade payable program liability	13,243			11,156			3,643
Accrued expenses	281,487			290,761			284,784
Deferred income taxes	14,957			15,417			20,084
Current maturities of long-term debt and obligations under capital leases	1,258			1,257			83,865
Total Current Liabilities	567,685			580,531			725,800
Long-term debt and obligations under capital leases, less current maturities	460,702			467,239			301,331
Convertible long-term debt	119,000			119,000			119,000
Other long-term liabilities	58,177			57,481			51,428
Deferred income taxes	3,509			2,937			27,911
Commitments and Contingencies
Stockholders’ Equity:
Common Stock, par value $1 per share:
Authorized 500,000,000 shares; Issued 68,557,041 shares	68,557			68,557			68,557
Additional paid-in capital	288,570			288,098			285,631
Retained earnings	477,438			481,926			529,177
Accumulated other comprehensive loss	(3,229		)	(3,565		)	(3,936		)
Less cost of shares in treasury - 12,109,304 shares
12,152,968 shares and 11,027,159 shares	180,546			181,187			169,079
Less cost of shares in benefits trust - 2,195,270 shares	59,264			59,264			59,264
Total Stockholders’ Equity	591,526			594,565			651,086
Total Liabilities and Stockholders’ Equity	$	1,800,599		$	1,821,753		$	1,876,556

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS	(dollar amounts in thousands)

Thirteen Weeks Ended	April 29, 2006			April 30, 2005
Cash Flows from Operating Activities:
Net loss	$	(703	)	$	(2,774	)
Adjustments to reconcile net loss to net cash provided by continuing operations:
Net loss from discontinued operations	48			306
Depreciation and amortization	20,723			18,785
Cumulative effect of change in accounting principle, net of tax	(267		)	—
Accretion of asset disposal obligation	67			28
Stock compensation expense	1,148			788
Deferred income taxes	(90		)	3,019
Loss from sales of assets	422			893
Excess tax benefits from stock based awards	(23		)	—
Increase in cash surrender value of life insurance policies	(385		)	(1,090		)
Changes in Operating Assets and Liabilities:
Decrease in accounts receivable, prepaid expenses and other	12,901			14,097
Increase in merchandise inventories	(2,358		)	(16,952		)
(Decrease) Increase in accounts payable	(5,200		)	22,443
Decrease in accrued expenses	(10,088		)	(25,262		)
Increase in other long-term liabilities	696			13,451
Net cash provided by continuing operations	16,891			27,732
Net cash used in discontinued operations	(117		)	(615		)
Net Cash Provided by Operating Activities	16,774			27,117
Cash Flows from Investing Activities:
Cash paid for property and equipment	(5,628		)	(19,413		)
Proceeds from sales of assets	135			68
Net Cash Used in Investing Activities	(5,493		)	(19,345		)
Cash Flows from Financing Activities:
Net payments under line of credit agreements	(6,450		)	(8,346		)
Excess tax benefits from stock based awards	23			—
Net borrowings on trade payable program liability	2,087			3,643
Reduction of long-term debt	(5		)	(4		)
Payments on capital lease obligations	(81		)	(18		)
Dividends paid	(3,705		)	(3,562		)
Proceeds from exercise of stock options	48			2,025
Proceeds from dividend reinvestment plan	219			(10		)
Net Cash Used in Financing Activities	(7,864		)	(6,272		)
Net Increase in Cash	3,417			1,500
Cash and Cash Equivalents at Beginning of Period	48,281			82,758
Cash and Cash Equivalents at End of Period	$	51,698		$	84,258
Supplemental Disclosure of Cash Flow Information:
Non-cash operating activities:
Accrued employee payroll tax withheld related to conversions of restricted stock units	$	138		$	178
Non-cash investing activities:
Accrued purchases of property and equipment	$	672		$	3,079

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE	(in thousands, except per share data)

	Thirteen weeks ended
	April 29, 2006			April 30, 2005
Net loss from continuing operations before cumulative effect of change in accounting principle	$	(922	)	$	(2,468	)
Average number of common shares assumed outstanding during period	54,224			55,185
Basic and Diluted Loss per Share:
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	(0.02	)	$	(0.04	)
Discontinued Operations, Net of Tax	—			(0.01		)
Cumulative Effect of Change in Accounting Principle, Net of Tax	0.01			—
Basic and Diluted Loss per Share	$	(0.01	)	$	(0.05	)

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
ADDITIONAL INFORMATION	(dollar amounts in thousands)

	Thirteen weeks ended
	April 29, 2006			April 30, 2005
Capital expenditures	$	6,300		$	22,492
Depreciation and amortization	$	20,723		$	18,785
Non-operating income:
Net rental revenue	$	673		$	365
Investment income	1,707			295
Other (expense) income	(121		)	1,078
Total	$	2,259		$	1,738
Comparable sales percentages:
Merchandise	-1.0		%	0.7		%
Service	-0.6		%	-4.6		%
Total	-0.9		%	-0.3		%
Total square feet of retail space (including service centers)	12,167,089			12,184,574
Total Store Count	593			594
Sales and Gross Profit by Line of Business (A):
Retail Sales	$	327,492		$	338,886
Service Center Revenue	228,437			224,628
Total Revenues	$	555,929		$	563,514
Gross Profit from Retail Sales	$	89,100		$	84,884
Gross Profit from Service Center Revenue	49,180			53,505
Total Gross Profit	$	138,280		$	138,389
Comparable Sales Percentages (A):
Retail Sales	-3.0		%	1.0		%
Service Center Revenue	2.2		%	-2.1		%
Total Revenues	-0.9		%	-0.3		%
Gross Profit Percentage by Line of Business (A):
Gross Profit Percentage from Retail Sales	27.2		%	25.0		%
Gross Profit Percentage from Service Center Revenue	21.5		%	23.8		%
Total Gross Profit Percentage	24.9		%	24.6		%

(A) Retail Sales include DIY and Commercial sales. Service Center Revenue includes revenue from labor and installed parts and tires.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
ADDITIONAL INFORMATION (Continued)	(dollar amounts in thousands)

Adjustments

In the fourth quarter of 2005 we completed the restructuring of substantially all of our vendor agreements to provide flexibility in how we use vendor support funds. Previously, the vendor agreements required us to use certain vendor support funds exclusively for promotions and to partially offset certain other direct expenses. Under EITF No. 02-16, these types of allowances are to be netted against the appropriate expenses they offset, once it is determined that the allowances are for specific, identifiable and incremental expenses. Under the restructured contracts it is not possible to make this determination. Therefore all vendor support funds are now treated as a reduction of inventories and are recognized as a reduction to Costs of Merchandise Sales as the inventories are sold, in accordance with EITF No. 02-16. For the periods below, all previously identified costs which had been netted against Selling, General and Administrative Expenses (SG&A) have been reclassified to Gross Profit from Merchandise Sales as if the vendor

agreements had been restructured as of January 30, 2005.

Please see the table below illustrating the effect of this adjustment on the thirteen week period ended April 30, 2005 (presented in both GAAP and Line of Busines formats), assuming that such change had been in effect during such period.

STATEMENTS OF OPERATIONS

GAAP Format

	Thirteen weeks ended						Thirteen weeks ended			Thirteen weeks ended
	April 30, 2005						April 30, 2005			April 29, 2006
	ACTUAL			ADJUSTMENTS			AS ADJUSTED			ACTUAL
			%			%			%			%
	Amount		Sales	Amount		Sales	Amount		Sales	Amount		Sales
Gross Profit from Merchandise Sales	$	121,945	26.3	$	8,826	1.9	$	130,771	28.2	$	127,159	27.8
Gross Profit from Service Revenue	16,444		16.4	—		—	16,444		16.4	11,121		11.2
Total Gross Profit	138,389		24.6	8,826		1.9	147,215		26.2	138,280		24.9
Selling, General and Administrative Expenses	135,161		24.0	8,826		1.9	143,987		25.6	131,093		23.6
Operating Profit	$	3,228	0.6	$	—	—	$	3,228	0.6	$	7,187	1.3

Line of Business Format

	Thirteen weeks ended						Thirteen weeks ended			Thirteen weeks ended
	April 30, 2005						April 30, 2005			April 29, 2006
	ACTUAL			ADJUSTMENTS			AS ADJUSTED			ACTUAL
			%			%			%			%
	Amount		Sales	Amount		Sales	Amount		Sales	Amount		Sales
Gross Profit from Retail Sales	$	84,884	25.0	$	6,347	1.9	$	91,231	26.9	$	89,100	27.2
Gross Profit from Service Center Revenue	53,505		23.8	2,479		1.1	55,984		24.9	49,180		21.5
Total Gross Profit	138,389		24.6	8,826		1.6	147,215		26.2	138,280		24.9
Selling, General and Administrative Expenses	135,161		24.0	8,826		1.6	143,987		25.6	131,093		23.6
Operating Profit	$	3,228	0.6	$	—	—	$	3,228	0.6	$	7,187	1.3