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 22, 2007

Date of Earliest Event Reported: May 22, 2007

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 22, 2007, the Company issued a press release announcing its earnings for the fiscal quarter ended May 5, 2007.

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 22, 2007.

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 22, 2007

5

EX-99.1

Exhibit 99.1

Pep Boys Reports Q1 Results
- -Earnings Per Share of $.06 vs. Loss Per Share of $0.02 on Gross
Margin Improvement and Reduced SG&A-

PHILADELPHIA—May 22, 2007 - 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 (first quarter) ended May 5, 2007.

Operating Results

First Quarter

Sales

Sales for the thirteen weeks ended May 5, 2007 were $546,013,000, as compared to the $556,601,000 for the thirteen weeks ended April 29, 2006.  Comparable Sales decreased 2.3%, including a 3.1% comparable merchandise sales decrease and a 1.5% comparable service revenue increase.  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 4.6% and comparable Service Center Revenue (labor plus installed merchandise and tires) increased 1.0%.

Earnings

Net Earnings (Loss) from Continuing Operations Before Cumulative Effect of Change in Accoun ting Principle increased from a Net Loss of $867,000 (($0.02) per share - basic and diluted) to Net Earnings of $3,220,000 ($0.06 per share - basic and diluted).

Commentary

President & CEO Jeffrey Rachor said, “In my first 60 days, I have visited nearly 100 of our stores, met talented and knowledgeable store staff, engaged hundreds of customers and met much of the store support center staff.  From what I have learned, I am more encouraged by the long term opportunity for Pep Boys and its shareholders than when I accepted this position.

While we have turned the corner on restoring the Company to profitability, much work remains to realize the company 6;s true financial potential, including continued margin expansion, cost management, and profitable sales growth.  These initiatives can continue to improve operating performance, even before sales productivity increases.

In particular, I am excited about the scale of the opportunity in service, a business I have worked in for 25 years, that has struggled for Pep Boys.  It is encouraging that our financial performance has started to turn, before we have begun to fully seize upon these opportunities in service.

Before I joined Pep Boys, the Company had already initiated programs to improve its operational efficiency and take advantage of asset monetization opportunities.  I plan to accelerate both of these initiatives while I develop a longer term strategic plan with our Board.”

CFO Harry Yanowitz commented, “Operating margins remain an important focus for Pep Boys.  This quarter, we improved g ross margin rates in both our retail and service center lines of business.  SG&A expenses, especially if one excludes CEO transition costs, were down significantly, as our productivity initiatives launched last summer start to show through to our results.

As we announced on last quarter’s earnings call, at the end of Q4 2006, we ceased commercial sales in certain of our stores, which while reducing our Q1 comparable sales (2007 vs. 2006) by approximately 1%, is consistent with our prioritization of profits over sales.

Q1 Operating Profit improved by $8.8 million from $7.2 million in 2006 to $16.0 million in 2007. Operating Profit included (i) in Q1 2006, a $0.4 million Net Loss from Dispositions of Assets and a $2.3 million gain from the settlement of a product liab ility legal reserve and (ii) in Q1 2007, a $3.7 million gain from an insurance claim for stores impaired during Hurricane Katrina in 2005 ($2.4 million recognized in Net Gains from Dispositions of Assets and $1.3 million in merchandise margins) and a $3.9 million charge to SG&A for CEO transition costs.

EBITDA, a non-GAAP indicator of levels of our financial performance that includes the gains and charges noted above, improved in Q1 2007 by $8.6 million to $39.0 million, as compared to Q1 2006.

Our trailing four quarter Operating (Loss) Profit has improved from a loss of $7.3 million to a profit of $44.9 million, while our trailing four quarter EBITDA has nearly doubled from $76.9 million to $139.4 millio n.

During the quarter we repurchased $50.8 million of our common shares, retiring 5.0% of our shares outstanding as of February 3, 2007.”

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 Wednesday, May 23rd at 8:30 a.m. ET over the Internet at Broadcast Networks’ Vcall website, located at http://www.investorcalendar.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 23rd on Pep Boys’ website at www.pepboys.com.

###

Contact:
Pep Boys, Philadelphia
Investor Contact: Harry Yanowitz, 215-430-9720
Media Contact: Marie Gehret, 215-430-9224
Internet: http://www.pepboys.com

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Pep Boys Financial Highlights

Thirteen weeks ended	May 5, 2007		April 29, 2006
Total Revenues	$	546,013,000	$	556,601,000
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	3,220,000	$	(867,000	)
Basic Earnings (Loss) Per Share:
Average Shares	53,122,000		54,224,000
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.06	$	(0.02	)
Diluted Earnings (Loss) Per Share:
Average Shares	53,634,000		54,224,000
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.06	$	(0.02	)

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EBITDA Reconciliation

EBITDA is defined as Net Earnings (Loss) plus Interest Expense, minus Income Tax Benefit, plus Income Tax Expense, plus Depreciation and Amortization.  EBITDA is not a measurement of financial performance under generally accepted accounting principles and may not be compared to similarly captioned information reported by other companies.  In addition, it does not replace net income or cash flow from operations as an indicator of financial performance or liquidity.  We believe EBITDA provides a useful indicator of levels of our financial performance and is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.  A reconciliation of EBITDA for the thirteen and fifty-three weeks ended May 5, 2007, and the thirteen and fifty-two weeks ended April 29, 2006, respectively, to the most directly comparable GAAP measure (Operating Profit) in accordance with SEC Regulation G follows:

	Thirteen weeks ended May 5, 2007			Thirteen weeks ended April 29, 2006
Operating Profit	$	16,079,000		$	7,242,000
Non-operating Income	1,905,000			2,259,000
Discontinued Operations, pre tax	(64,000		)	(105,000		)
Cumulative Effect of Change in Accounting Principle, pre tax	—			268,000
Depreciation and Amortization	21,111,000			20,723,000
EBITDA	$	39,031,000		$	30,387,000

	Trailing Four Quarters Fifty-three weeks ended May 5, 2007			Trailing Four Quarters Fifty-two weeks ended April 29, 2006
Operating Profit	$	44,859,000		$	(7,342,000	)
Non-operating Income	6,669,000			4,418,000
Discontinued Operations, pre tax	(1,004,000		)	918,000
Cumulative Effect of Change in Accounting Principle, pre tax	—			(2,914,000		)
Depreciation and Amortization	88,864,000			81,825,000
EBITDA	$	139,388,000		$	76,905,000

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EX-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	May 5, 2007					April 29, 2006
				%					%
	Amount			Sales		Amount			Sales
Merchandise Sales	$	445,035		81.5		$	457,315		82.2
Service Revenue	100,978			18.5		99,286			17.8
Total Revenues	546,013			100.0		556,601			100.0
Costs of Merchandise Sales	315,310			70.9		329,548			72.1
Costs of Service Revenue	88,911			88.0		88,175			88.8
Total Costs of Revenues	404,221			74.0		417,723			75.0
Gross Profit from Merchandise Sales	129,725			29.1		127,767			27.9
Gross Profit from Service Revenue	12,067			12.0		11,111			11.2
Total Gross Profit	141,792			26.0		138,878			25.0
Selling, General and Administrative Expenses	128,072			23.5		131,221			23.6
Net Gain (Loss) from Dispositions of Assets	2,359			0.4		(415		)	(0.1	)
Operating Profit	16,079			2.9		7,242			1.3
Non-operating Income	1,905			0.3		2,259			0.4
Interest Expense	12,656			2.3		10,337			1.9
Earnings (Loss) From Continuing Operations Before Income Taxes and Cumulative Effect of Change in Accounting Principle	5,328			1.0		(836		)	(0.2	)
Income Tax Expense	2,108			39.6	(1)	31			(3.7	)(1)
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	3,220			0.6		(867		)	(0.2	)
Discontinued Operations, Net of Tax	(45		)	—		(103		)	—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			—		267			—
Net Earnings (Loss)	3,175			0.6		(703		)	(0.1	)
Retained Earnings, beginning of period	463,797					481,926
Cumulative effect adjustment for adoption of FIN 48	(155		)			—
Cash Dividends	(3,581		)			(3,705		)
Effect of Stock Options	(479		)			(66		)
Dividend Reinvestment Plan	—					(14		)
Retained Earnings, end of period	$	462,757				$	477,438
Basic Earnings (Loss) per Share:
Basic Weighted Average Shares Outstanding	53,122					54,224
Net Earnings (Loss) From Continuing Operations Before
Cumulative Effect of Change in Accounting Principle	$	0.06				$	(0.02	)
Discontinued Operations, Net of Tax	—					—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—					0.01
Basic Earnings (Loss) per Share	$	0.06				$	(0.01	)
Diluted Earnings (Loss) per Share:
Diluted Weighted Average Shares Outstanding	53,634					54,224
Net Earnings (Loss) From Continuing Operations Before
Cumulative Effect of Change in Accounting Principle	$	0.06				$	(0.02	)
Discontinued Operations, Net of Tax	—					—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—					0.01
Diluted Earnings (Loss) per Share	$	0.06				$	(0.01	)
Cash Dividends per Share	$	0.0675				$	0.0675

(1)As a percentage of earnings (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle.

2

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
(UNAUDITED)

CONSOLIDATED BALANCE SHEETS	(dollar amounts in thousands, except per share amounts)
	May 5, 2007			February 3, 2007			April 29, 2006
Assets
Current Assets:
Cash and cash equivalents	$	30,781		$	21,884		$	51,698
Accounts receivable, net	31,261			29,582			37,928
Merchandise inventories	618,814			607,042			618,650
Prepaid expenses	40,145			39,264			40,648
Other	62,142			70,368			72,049
Assets held for disposal	—			—			2,083
Total Current Assets	783,143			768,140			823,056
Property and Equipment - at cost:
Land	251,705			251,705			257,105
Buildings and improvements	931,268			929,225			917,007
Furniture, fixtures and equipment	692,391			684,042			667,145
Construction in progress	3,049			3,464			16,672
	1,878,413			1,868,436			1,857,929
Less accumulated depreciation and amortization	982,585			962,189			926,857
Property and Equipment - net	895,828			906,247			931,072
Deferred income taxes	25,075			24,828			—
Other	64,476			67,984			46,471
Total Assets	$	1,768,522		$	1,767,199		$	1,800,599
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	232,872		$	265,489		$	256,740
Trade payable program liability	14,046			13,990			13,243
Accrued expenses	281,120			292,280			281,487
Deferred income taxes	25,215			28,931			14,957
Current maturities of long-term debt and obligations under capital leases	3,474			3,490			1,258
Total Current Liabilities	556,727			604,180			567,685
Long-term debt and obligations under capital leases, less current maturities	623,761			535,031			460,702
Convertible long-term debt	—			—			119,000
Other long-term liabilities	66,959			60,233			58,177
Deferred income taxes	—			—			3,509
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	292,837			289,384			288,570
Retained earnings	462,757			463,797			477,438
Accumulated other comprehensive loss	(10,296		)	(9,380		)	(3,229		)
Less cost of shares in treasury - 15,000,595 shares, 12,427,687 shares and 12,109,304 shares	233,516			185,339			180,546
Less cost of shares in benefits trust - 2,195,270 shares	59,264			59,264			59,264
Total Stockholders’ Equity	521,075			567,755			591,526
Total Liabilities and Stockholders’ Equity	1,768,522			$	1,767,199		$	1,800,599

3

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
(UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS	(dollar amounts in thousands)
Thirteen weeks ended	May 5, 2007			April 29, 2006
Cash Flows from Operating Activities:
Net Earnings (Loss)	$	3,175		$	(703	)
Adjustments to reconcile net loss to net cash provided by continuing operations:
Net loss from discontinued operations	45			103
Depreciation and amortization	21,111			20,723
Cumulative effect of change in accounting principle, net of tax	—			(267		)
Accretion of asset disposal obligation	65			67
Stock compensation expense	4,390			1,148
Deferred income taxes	1,642			(90		)
(Gain) loss from dispositions of assets	(2,359		)	415
Loss from derivative valuation	1,802			—
Excess tax benefits from stock based awards	(301		)	(23		)
Increase in cash surrender value of life insurance policies	(534		)	(385		)
Changes in Operating Assets and Liabilities:
Decrease in accounts receivable, prepaid expenses and other	8,818			12,901
Increase in merchandise inventories	(11,772		)	(2,358		)
Decrease in accounts payable	(32,617		)	(5,200		)
Decrease in accrued expenses	(2,257		)	(10,088		)
Increase in other long-term liabilities	1,075			696
Net cash (used in) provided by continuing operations	(7,717		)	16,939
Net cash used in discontinued operations	(90		)	(165		)
Net Cash (Used in) Provided by Operating Activities	(7,807		)	16,774
Cash Flows from Investing Activities:
Cash paid for property and equipment	(11,610		)	(5,628		)
Proceeds from dispositions of assets	—			135
Net Cash Used in Investing Activities	(11,610		)	(5,493		)
Cash Flows from Financing Activities:
Net borrowings (payments) under line of credit agreements	89,605			(6,450		)
Excess tax benefits from stock based awards	301			23
Net borrowings on trade payable program liability	56			2,087
Reduction of long-term debt	(808		)	(5		)
Payments on capital lease obligations	(83		)	(81		)
Dividends paid	(3,581		)	(3,705		)
Repurchase of common stock	(58,152		)	—
Proceeds from exercise of stock options	773			48
Proceeds from dividend reinvestment plan	203			219
Net Cash Provided by (Used in) Financing Activities	28,314			(7,864		)
Net Increase in Cash	8,897			3,417
Cash and Cash Equivalents at Beginning of Period	21,884			48,281
Cash and Cash Equivalents at End of Period	$	30,781		$	51,698
Supplemental Disclosure of Cash Flow Information:	—			—
Non-cash investing activities:
Accrued purchases of property and equipment	$	2,804		$	672

4

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
(UNAUDITED)

	(in thousands, except per share data)
Thirteen weeks ended	May 5, 2007			April 29, 2006
(a)   Net earnings (loss) from continuing operations Before Cumulative Effect of	$	3,220		$	(867	)
Change in Accounting Principle
Discontinued Operations, Net of Tax	(45		)	(103		)
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			267
Net Earnings (Loss)	$	3,175		$	(703	)
(b)   Average number of common shares outstanding during period	53,122			54,224
Common shares assumed issued upon exercise of dilutive stock options, net of  assumed repurchase, at the average market price	512			—
(c)   Average number of common shares assumed outstanding during period	53,634			54,224
Basic Earnings (Loss) per Share:
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.06		$	(0.02	)
Discontinued Operations, Net of Tax	—			—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			0.01
Basic Earnings (Loss) per Share	$	0.06		$	(0.01	)
Diluted Earnings (Loss) per Share:
Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.06		$	(0.02	)
Discontinued Operations, Net of Tax	—			—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			0.01
Diluted Earnings (Loss) per Share	$	0.06		$	(0.01	)

5

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
(UNAUDITED)

ADDITIONAL INFORMATION	(dollar amounts in thousands)
Thirteen weeks ended	May 5, 2007			April 29, 2006
Capital expenditures	$	10,453		$	6,300
Depreciation and amortization	$	21,111		$	20,723
Non-operating income:
Net rental revenue	$	798		$	673
Investment income	1,133			1,707
Other (expense) income	(26		)	(121		)
Total	$	1,905		$	2,259
Comparable sales percentages:
Merchandise	-3.1		%	-1.0		%
Service	1.5		%	-0.6		%
Total	-2.3		%	-0.9		%
Total square feet of retail space (including service centers)	12,164,029			12,167,089
Total Store Count	593			593
Sales and Gross Profit by Line of Business (A):
Retail Sales	$	314,704		$	327,957
Service Center Revenue	231,309			228,644
Total Revenues	$	546,013		$	556,601
	—			—
Gross Profit from Retail Sales	$	89,743		$	89,560
Gross Profit from Service Center Revenue	52,049			49,318
Total Gross Profit	$	141,792		$	138,878
	—			—
Comparable Sales Percentages(A):
Retail Sales	-4.6		%	-3.0		%
Service Center Revenue	1.0		%	2.2		%
Total Revenues	-2.3		%	-0.9		%
Gross Profit Percentage by Line of Business(A):
Gross Profit Percentage from Retail Sales	28.5		%	27.3		%
Gross Profit Percentage from Service Center Revenue	22.5		%	21.6		%
Total Gross Profit Percentage	26.0		%	25.0		%

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

6