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: September 7, 2010

Date of Earliest Event Reported: September 7, 2010

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):

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

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

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

oPre-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 September 7, 2010, The Pep Boys — Manny, Moe & Jack issued a press release announcing its earnings for the fiscal quarter ended July 31, 2010.

The information in Items 2.02 and 9.01 (including the Exhibits filed herewith) of 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 Items 2.02 and 9.01 (including the Exhibits filed herewith) of 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

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

Exhibit No. 99.1  Press release dated September 7, 2010.

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/ Raymond L. Arthur
		Raymond L. Arthur
		Executive Vice President and
		Chief Financial Officer
Date: September 7, 2010

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Pep Boys Reports Second Quarter 2010 Results

- Net Earnings of $0.20 per Share on 3.3% Sales Increase -

PHILADELPHIA — September 7, 2010 — The Pep Boys — Manny, Moe & Jack (NYSE: “PBY”), the nation’s leading automotive aftermarket service and retail chain, today announced results for the thirteen (second quarter) and twenty-six (first half) weeks ended July 31, 2010.

Second Quarter

Sales

Sales for the thirteen weeks ended July 31, 2010 increased by $15.9 million, or 3.3%, to $504.9 million from $488.9 million for the thirteen weeks ended August 1, 2009. Comparable sales increased 1.8%, including a 0.7% comparable service revenue decrease and a 2.5% comparable merchandise sales increase. In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both our service center and retail lines of business. Re-categorizing sales into the respective lines of business from which they are generated, comparable service center revenue (labor plus installed merchandise and tires) increased 0.1%, while comparable retail sales (DIY and Commercial) increased 3.4%.

Earnings

Net earnings for the second quarter of fiscal 2010 increased to $10.6 million ($0.20 per share) from $7.7 million ($0.15 per share) recorded in the same period last year. The second quarter 2010 results reflect increased sales and improved total gross profit margin rates and include, on a pre-tax basis, a $2.4 million gain from the disposition of assets and a $1.0 million reversal of an inventory related accrual, partially offset by a $1.0 million asset impairment charge.

First Half

Sales

Sales for the twenty-six weeks ended July 31, 2010 were $1,014.9 million, as compared to $985.4 million for the twenty-six weeks ended August 1, 2009. Comparable sales increased 1.6%, consisting of a 0.3% comparable service revenue decrease and a 2.1% comparable merchandise sales increase. Re-categorizing sales (see above), comparable service center revenue increased 0.5%, while comparable retail sales increased 2.6%.

Earnings

Net earnings for the first half of 2010 increased to $22.5 million ($0.43 per share) from the $18.6 million ($0.36 per share) recorded in the same period last year. The first half 2010 results reflect increased sales and improved total gross profit margin rates and include, on a pre-tax basis, a $2.5 million gain from the disposition of assets and a $1.0 million reversal of an inventory related accrual, partially offset by a $1.0 million asset impairment charge. The first half 2009 results included, on a pre-tax basis, a $6.2 million gain resulting from bond repurchases.

Commentary

“Our results mark the sixth consecutive quarter of improved profitability,” said President and CEO Mike Odell. “We continue to earn the trust of our customers every day by delivering an experience that is based on speed, expertise, respect and value.

“Our customer care, value-priced offerings and core automotive assortments are resonating with our customers and our 18,000 associates are working together to deliver on our vision to be the automotive solutions provider of choice for the value oriented customer. We are excited about our growth. So far this year, we have opened seven Service & Tire Centers and two Supercenters as well as eight Superhubs with an expanded parts assortment and two Speed Shops within existing Supercenters.”

“Disciplines are the key to our improved profitability allowing us to convert modest sales growth into large profit gains and positive cash flow,” commented CFO Ray Arthur. “We ended the quarter with $92.4 million in cash, no drawings on our line of credit and the liquidity to continue expansion of our Service & Tire Center network. We anticipate opening a total of approximately 35 new locations, consisting of Service & Tire Centers and Supercenters, this year.”

Pep Boys has more than 6,000 service bays within over 590 stores located in 35 states and Puerto Rico. Along with its full-service vehicle maintenance and repair 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 www.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 implementation of its long-term strategic plan, 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 quarterly conference calls discussing its results and related matters. The call for the second quarter will be broadcast live on Wednesday, September 8 at 8:30 a.m. ET over the Internet at the 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 September 8 on Pep Boys’ website at www.pepboys.com.

###

Contact:

Pep Boys, Philadelphia

Investor Contact: Ray Arthur, 215-430-9720

Media Contact: Alex Spooner, 215-430-9588
Internet: http://www.pepboys.com

Pep Boys Financial Highlights

Thirteen Weeks Ended	July 31, 2010		August 1, 2009
Total revenues	$	504,855,000	$	488,911,000
Net earnings	$	10,598,000	$	7,735,000
Basic earnings per share:
Average shares	52,682,000		52,384,000
Basic earnings per share:	$	0.20	$	0.15
Diluted earnings per share:
Average shares	53,129,000		52,699,000
Diluted earnings per share:	$	0.20	$	0.15

Twenty-Six weeks ended	July 31, 2010		August 1, 2009
Total revenues	$	1,014,888,000	$	985,399,000
Net earnings	$	22,548,000	$	18,644,000
Basic earnings per share:
Average shares	52,609,000		52,359,000
Basic earnings per share:	$	0.43	$	0.36
Diluted earnings per share:
Average shares	53,035,000		52,538,000
Diluted earnings per share:	$	0.43	$	0.36

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										Twenty-Six weeks ended
	July 31, 2010					August 1, 2009					July 31, 2010					August 1, 2009
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	406,179		80.5		$	392,071		80.2		$	815,368		80.3		$	790,248		80.2
Service revenue	98,676			19.5		96,840			19.8		199,520			19.7		195,151			19.8
Total revenues	504,855			100.0		488,911			100.0		1,014,888			100.0		985,399			100.0
Costs of merchandise sales	282,362			69.5		275,790			70.3		566,158			69.4		556,825			70.5
Costs of service revenue	87,992			89.2		84,931			87.7		176,634			88.5		170,783			87.5
Total costs of revenues	370,354			73.4		360,721			73.8		742,792			73.2		727,608			73.8
Gross profit from merchandise sales	123,817			30.5		116,281			29.7		249,210			30.6		233,423			29.5
Gross profit from service revenue	10,684			10.8		11,909			12.3		22,886			11.5		24,368			12.5
Total gross profit	134,501			26.6		128,190			26.2		272,096			26.8		257,791			26.2
Selling, general and administrative expenses	113,108			22.4		109,482			22.4		224,740			22.1		217,535			22.1
Net gain (loss) from dispositions of assets	2,449			0.5		(16		)	—		2,494			0.2		(13		)	—
Operating profit	23,842			4.7		18,692			3.8		49,850			4.9		40,243			4.1
Non-operating income	621			0.1		539			0.1		1,205			0.1		942			0.1
Interest expense	6,643			1.3		6,466			1.3		13,251			1.3		8,402			0.9
Earnings from continuing operations before income taxes	17,820			3.5		12,765			2.6		37,804			3.7		32,783			3.3
Income tax expense	7,021			39.4	(1)	4,907			38.4	(1)	14,845			39.3	(1)	13,862			42.3	(1)
Earnings from continuing operations	10,799			2.1		7,858			1.6		22,959			2.3		18,921			1.9
Loss from discontinued operations, net of tax	(201		)	—		(123		)	—		(411		)	—		(277		)	—
Net earnings	10,598			2.1		7,735			1.6		22,548			2.2		18,644			1.9
Retained earnings, beginning of period	384,451					367,882					374,836					358,670
Cash dividends	(1,581		)			(1,577		)			(3,160		)			(3,152		)
Shares issued and other	(223		)			(77		)			(979		)			(199		)
Retained earnings, end of period	$	393,245				$	373,963				$	393,245				$	373,963
Basic earnings per share:
Earnings from continuing operations	$	0.21				$	0.15				$	0.44				$	0.36
Discontinued operations, net of tax	(0.01		)			—					(0.01		)			—
Basic earnings per share	$	0.20				$	0.15				$	0.43				$	0.36
Diluted earnings per share:
Earnings from continuing operations	$	0.20				$	0.15				$	0.43				$	0.36
Discontinued operations, net of tax	—					—					—					—
Diluted earnings per share	$	0.20				$	0.15				$	0.43				$	0.36
Cash dividends per share	$	0.03				$	0.03				$	0.06				$	0.06

(1) As a percentage of earnings from continuing operations before income taxes

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

	July 31, 2010			January 30, 2010			August 1, 2009
Assets
Current assets:
Cash and cash equivalents	$	92,363		$	39,326		$	21,886
Accounts receivable, less allowance for uncollectible accounts of $1,703; $1,488 and $1,799	24,204			22,983			21,801
Merchandise inventories	558,932			559,118			548,763
Prepaid expenses	20,816			24,784			18,567
Other current assets	51,598			65,428			53,151
Assets held for disposal	1,778			4,438			9,912
Total current assets	749,691			716,077			674,080
Property and equipment - net	694,262			706,450			719,008
Deferred income taxes	58,968			58,171			77,578
Other long-term assets	17,364			18,388			18,092
Total assets	$	1,520,285		$	1,499,086		$	1,488,758
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	196,676		$	202,974		$	222,974
Trade payable program liability	55,280			34,099			2,614
Accrued expenses	226,505			242,416			236,144
Deferred income taxes	35,750			29,984			41,118
Current maturities of long-term debt	1,079			1,079			1,079
Total current liabilities	515,290			510,552			503,929
Long-term debt less current maturities	305,661			306,201			308,335
Other long-term liabilities	76,325			73,933			69,872
Deferred gain from asset sales	159,177			165,105			164,947
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	294,535			293,810			293,037
Retained earnings	393,245			374,836			373,963
Accumulated other comprehensive loss	(18,758		)	(17,691		)	(16,477		)
Less cost of shares in treasury - 16,072,557 shares, 16,164,074 shares and 14,042,311 shares	273,747			276,217			218,141
Less cost of shares in benefits trust - 2,195,270 shares	—			—			59,264
Total stockholders’ equity	463,832			443,295			441,675
Total liabilities and stockholders’ equity	$	1,520,285		$	1,499,086		$	1,488,758

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

Twenty-Six weeks ended	July 31, 2010			August 1, 2009
Cash flows from operating activities:
Net earnings	$	22,548		$	18,644
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Loss from discontinued operations, net of tax	411			277
Depreciation and amortization	36,656			35,338
Amortization of deferred gain from asset sales	(6,299		)	(6,086		)
Stock compensation expense	1,998			1,284
Gain on debt retirement	—			(6,248		)
Deferred income taxes	5,600			4,455
Gain from sales of assets	(2,494		)	13
Loss from asset impairment	970			47
Other	179			188
Changes in operating assets and liabilities:
Decrease in accounts receivable, prepaid expenses and other	19,673			24,143
Decrease in merchandise inventories	186			16,168
(Decrease) increase in accounts payable	(6,298		)	10,634
Decrease in accrued expenses	(14,917		)	(18,658		)
Increase in other long-term liabilities	911			1,972
Net cash provided by continuing operations	59,124			82,171
Net cash used in discontinued operations	(1,249		)	(543		)
Net cash provided by operating activities	57,875			81,628
Cash flows from investing activities:
Cash paid for property and equipment	(27,284		)	(17,481		)
Proceeds from dispositions of assets	4,077			1,098
Other	(144		)	(500		)
Net cash used in continuing operations	(23,351		)	(16,883		)
Net cash provided by discontinued operations	569			1,758
Net cash used in investing activities	(22,782		)	(15,125		)
Cash flows from financing activities:
Borrowings under line of credit agreements	16,290			222,017
Payments under line of credit agreements	(16,290		)	(244,284		)
Borrowings on trade payable program liability	169,875			35,300
Payments on trade payable program liability	(148,694		)	(64,616		)
Debt payments	(540		)	(11,451		)
Dividends Paid	(3,160		)	(3,152		)
Other	463			237
Net cash provided by (used in) financing activities	17,944			(65,949		)
Net increase in cash and cash equivalents	53,037			554
Cash and cash equivalents at beginning of period	39,326			21,332
Cash and cash equivalents at end of period	$	92,363		$	21,886
Supplemental cash flow information:
Cash paid for income taxes	$	810		$	2,585
Cash paid for interest	$	11,452		$	12,366
Accrued purchases of property and equipment	$	662		$	1,170

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

			Thirteen Weeks Ended						Twenty-Six weeks ended
			July 31, 2010			August 1, 2009			July 31, 2010			August 1, 2009
(a)	Earnings from continuing operations		$	10,799		$	7,858		$	22,959		$	18,921
	Loss from discontinued operations, net of tax		(201		)	(123		)	(411		)	(277		)
	Net earnings		$	10,598		$	7,735		$	22,548		$	18,644
(b)	Basic average number of common shares outstanding during period		52,682			52,384			52,609			52,359
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		447			315			426			179
(c)	Diluted average number of common shares assumed outstanding during period		53,129			52,699			53,035			52,538
	Basic earnings per share:
	Earnings from continuing operations	(a) / (b)	$	0.21		$	0.15		$	0.44		$	0.36
	Discontinued operations, net of tax		(0.01		)	—			(0.01		)	—
	Basic earnings per share		$	0.20		$	0.15		$	0.43		$	0.36
	Diluted earnings per share:
	Earnings from continuing operations	(a) / (c)	$	0.20		$	0.15		$	0.43		$	0.36
	Discontinued operations, net of tax		—			—			—			—
	Diluted earnings per share		$	0.20		$	0.15		$	0.43		$	0.36

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

	Thirteen Weeks Ended						Twenty-Six weeks ended
	July 31, 2010			August 1, 2009			July 31, 2010			August 1, 2009
Capital expenditures	$	14,773		$	11,763		$	27,284		$	17,481
Depreciation and amortization	$	18,442		$	17,965		$	36,656		$	35,338
Non-operating income:
Net rental revenue	$	570		$	487		$	1,087		$	789
Investment income	45			56			111			126
Other income	6			(4		)	7			27
Total	$	621		$	539		$	1,205		$	942
Comparable sales percentages:
Merchandise	2.5		%	-4.0		%	2.1		%	-2.6		%
Service	-0.7		%	5.2		%	-0.3		%	4.5		%
Total	1.8		%	-2.3		%	1.6		%	-1.3		%
Total square feet of retail space (including service centers)							11,749,000			11,534,000
Total store count							594			566
Sales and gross profit by line of business (A):
Retail sales	$	268,804		$	259,435		$	538,511		523,846
Service center revenue	236,051			229,476			476,377			461,553
Total revenues	$	504,855		$	488,911		$	1,014,888		$	985,399
Gross profit from retail sales	$	78,830		$	70,746		$	158,584		144,301
Gross profit from service center revenue	55,671			57,444			113,512			113,490
Total gross profit	$	134,501		$	128,190		$	272,096		$	257,791
Comparable sales percentages (A):
Retail sales	3.4		%	-6.0		%	2.6		%	-4.6		%
Service center revenue	0.1		%	2.3		%	0.5		%	2.8		%
Total revenues	1.8		%	-2.3		%	1.6		%	-1.3		%
Gross profit percentage by line of business (A):
Gross profit percentage from retail sales	29.3		%	27.3		%	29.4		%	27.5		%
Gross profit percentage from service center revenue	23.6		%	25.0		%	23.8		%	24.6		%
Total gross profit percentage	26.6		%	26.2		%	26.8		%	26.2		%

(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.