UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR
                  15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       OR

                 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _______ to _______

                         Commission File Number 0-24860


                              PIERCING PAGODA, INC.

             (Exact Name of Registrant as Specified in its Charter)

            Delaware                                     23-1894725
(State or Other Jurisdiction of              (I.R.S. Employer Identification
 Incorporation or Organization)                             Number)


         3910 Adler Place
            Bethlehem, PA                                  18017
(Address of Principal Executive Offices)                 (Zip Code)

       Registrant's Telephone Number, Including Area Code: (610) 691-0437

                                       N/A
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report.)


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 [ ]

The number of shares outstanding of the registrant's common stock is 5,261,095
(as of November 12, 1996)


<PAGE>

                              PIERCING PAGODA, INC.


                                      INDEX
                                                                           PAGE
                      PART I - FINANCIAL INFORMATION                      NUMBER

Item 1.   Financial Statements

          Consolidated balance sheets as of
          September 30, 1996 and March 31, 1996                              3

          Consolidated statements of operations for the three months
          ended September 30, 1996 and 1995 and six months ended
          September 30, 1996 and 1995                                        4

          Consolidated statements of cash flows for the six months 
          ended September 30, 1996 and 1995                                  5

          Notes to consolidated financial statements                         7

Item 2    Management's discussion and analysis of financial condition 
          and results of operations                                          8

                          PART II - OTHER INFORMATION

Item 4    Submission of matters to a vote of security holders               12

Item 6    Exhibits and reports on form 8-k                                  13

          Signatures                                                        14


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                      PIERCING PAGODA, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                           September, 30     March 31,
                                                                               1996            1996
Assets                                                                     (Unaudited)
<S>                                                                            <C>            <C>    

Current assets:
    Cash                                                                       $ 2,276        $ 1,864
    Accounts receivable                                                            877            794
    Inventory                                                                   37,383         25,390
    Deposits for inventory purchases                                             3,431            361
    Prepaid expenses and other current assets                                      298            468
    Prepaid income taxes                                                         1,138            883
    Deferred tax assets                                                            693            693

                                                                               -------        -------
Total current assets                                                            46,096         30,453

Property, fixtures and equipment, net                                           19,223         15,806
Other assets                                                                     1,664          1,647

                                                                               =======        =======
                                                                               $66,983        $47,906
                                                                               =======        =======
    Liabilities and Stockholders' Equity

Current liabilities
    Accounts payable                                                           $ 9,243        $ 1,811
    Current installments of long-term debt and revolving line of credit         17,388          5,910
    Accrued expenses and taxes withheld                                          6,436          6,784

                                                                               -------        -------
Total current liabilities                                                       33,067         14,505

Long-term debt, less current installments                                        2,707          2,350
Deferred tax liabilities                                                         1,259          1,259
Unbilled rent                                                                      270            213

                                                                               -------        -------
Total liabilities                                                               37,303         18,327

Commitments and contingencies
Stockholders' equity
    Preferred stock, par value $.01 per share,
         authorized 3,000,000 shares. None issued                                   --             --
    Common stock, par value $.01 per share, authorized
         15,000,000 shares. Issued 5,258,952 shares and 5,240,293
         at September, 30, 1996 and March 31, 1996, respectively                    53             53
    Additional paid-in capital                                                  22,354         22,183
    Retained earnings                                                            7,273          7,343

                                                                               -------        -------
Total stockholders' equity                                                      29,680         29,579
                                                                               -------        -------
                                                                               $66,983        $47,906
                                                                               =======        =======
</TABLE>


See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

                      PIERCING PAGODA, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Three months ended                Six months ended
                                                           September 30,                    September 30,
                                                       1996             1995            1996            1995
<S>                                                 <C>              <C>             <C>              <C>     
Net sales                                            $ 32,439         $ 23,012        $ 62,683         $ 45,387
Cost of goods sold and occupancy expenses,
    (excluding depreciation on kiosks)                 18,723           13,142          36,186           26,222
                                                     --------         --------        --------         --------
Gross profit                                           13,716            9,870          26,497           19,165

Selling, general and administrative expenses,
    (including depreciation on kiosks)                 13,477            9,528          25,898           18,455
                                                     --------         --------        --------         --------
Income from operations                                    239              342             599              710

Interest and other income                                  74               60             134              108
Interest expense                                          487              311             848              451
                                                     --------         --------        --------         --------
Earnings (loss) before income taxes                      (174)              91            (115)             367

Income tax expense (benefit)                              (69)              46             (45)             160
                                                     ========         ========        ========         ========
Net income (loss)                                    ($   105)        $     45        ($    70)        $    207
                                                     ========         ========        ========         ========

Earnings (loss) per share                            ($  0.02)        $   0.01        ($  0.01)        $   0.04
                                                     ========         ========        ========         ========

Weighted average common shares and
    common share equivalents                            5,370            5,315           5,369            5,294
                                                     ========         ========        ========         ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4

<PAGE>
                      PIERCING PAGODA, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                         Six-months ended
                                                                           September 30,
                                                                       1996             1995
<S>                                                                  <C>              <C>     
Cash flows from operating activities:
   Net income (loss)                                                 ($    70)        $    207
   Adjustments to reconcile net income to net cash used
     in operating activities:
       Depreciation and amortization                                    1,639            1,291
       Loss on disposal of property, fixtures and equipment                48               27
       Other changes in other assets                                      (85)            (189)
       Deferred income taxes                                               --             (126)
       Decrease (increase) in assets:
         Accounts receivable                                              (83)             264
         Inventory                                                    (11,993)         (13,169)
         Deposits for inventory purchases                              (3,070)          (2,730)
         Prepaid expenses and other current assets                        170           (1,420)
         Prepaid income taxes                                            (255)              --
       Increase (decrease) in liabilities:
         Accounts payable                                               7,432            4,545
         Tax indemnification payable                                       --           (1,202)
         Income taxes payable                                              --              (20)
         Accrued expenses and taxes withheld                             (348)             658
         Unbilled rent                                                     57              (12)

                                                                     --------         --------
Net cash used in operating activities                                  (6,558)         (11,876)

Cash flows from investing activities:
   Additions to property, fixtures and equipment                       (5,070)          (3,764)
   Proceeds from disposal of property, fixtures and equipment              19               --
   Noncurrent deposits, net                                                15              (49)

                                                                     --------         --------
Net cash used in investing activities                                  (5,036)          (3,813)

Cash flows from financing activities:
   Repayments of long-term debt                                           (10)              --
   Revolving line of credit, net                                       11,445           14,300
   Proceeds from issuance of long-term debt                               400               --
   Cash dividends paid                                                     --              (45)
   Proceeds from issuance of common stock                                 171               --

                                                                     --------         --------
Net cash provided by financing activities                              12,006           14,255

                                                                     --------         --------
Net increase (decrease) in cash                                           412           (1,434)

Cash at beginning of period                                             1,864            2,320

                                                                     ========         ========
Cash at end of period                                                $  2,276         $    886
                                                                     ========         ========
</TABLE>

                                       5
<PAGE>
                      PIERCING PAGODA, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            Six months ended
                                                              September 30,
                                                            1996          1995
<S>                                                        <C>           <C>   
Supplemental  disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                              $  801        $  433
                                                           ======        ======
     Income taxes, net                                     $  210        $1,763
                                                           ======        ======
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1    Summary of significant accounting policies

       The accompanying  consolidated  financial  statements of Piercing Pagoda,
       Inc. and subsidiary (the "Company") have been prepared in accordance with
       the  instructions  to Form 10-Q and do not include all of the information
       and footnotes  required by generally accepted  accounting  principles for
       complete financial  statements.  These consolidated  financial statements
       include the results of operations for Piercing Pagoda,  Inc. and a wholly
       owned subsidiary.  All intercompany  transactions have been eliminated in
       consolidation.  These consolidated financial statements should be read in
       conjunction with the Company's financial statements and notes thereto for
       the year ended March 31, 1996. The financial  information included herein
       is  unaudited;   however,   the  information   reflects  all  adjustments
       (consisting  solely of normal  recurring  adjustments)  that are,  in the
       opinion of management, necessary for a fair presentation of the financial
       position, results of operations and cash flows for the interim periods.

       Operating  results  for  the  three-month  and  six-month  periods  ended
       September 30, 1996 are not necessarily indicative of the results that may
       be expected for the entire fiscal year.

Note 2    Property, Fixtures and Equipment

       A summary of major classes of property, fixtures and equipment follows
       (in thousands):

<TABLE>
<CAPTION>
                                                                September 30,   March 31,
                                                                    1996          1996
<S>                                                               <C>            <C>    
          Land                                                    $   688        $   688
          Furniture and fixtures                                    2,352          2,077
          Kiosks                                                   16,523         13,908
          Building and improvements                                 4,005          3,822
          Computer equipment, software and other equipment          6,700          5,130
                                                                  -------        -------
                                                                   30,268         25,625
          Less accumulated depreciation and amortization           11,045          9,819
                                                                  =======        =======
                                                                  $19,223        $15,806
                                                                  =======        =======
</TABLE>

                                       7
<PAGE>

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Background

       The Company's  consolidated  net sales are  comprised  primarily of sales
       generated by the Company's stores and, to a much lesser extent, wholesale
       sales primarily to an independent  store operator in Florida to which the
       Company  licenses  the use of its store name and  concept  (the  "Florida
       Licensee"). Cost of goods sold and occupancy expenses include the cost of
       merchandise, rent and occupancy and the cost of preparing merchandise for
       sale.  Selling,  general and  administrative  expenses  include store and
       supervisory payroll,  corporate overhead and non-occupancy store expenses
       including depreciation of kiosks.

Results of operations

Three months ended September 30, 1996 and 1995

       Consolidated net sales increased $9.4 million, or 41%, from $23.0 million
       for the three months ended  September  30, 1995 to $32.4  million for the
       three months ended September 30, 1996. This increase was primarily due to
       an  increase in the  average  number of stores open for the three  months
       ended  September 30, 1996 as compared to the three months ended September
       30, 1995 and a $2.1  million,  or 9%,  increase in  comparable  store net
       sales.  There  were a total of 565  stores  open at  September  30,  1996
       compared to 416 at September  30,  1995,  an increase of 36%. The average
       jewelry  units sold per store  increased 4% to 2,500 for the three months
       ended  September 30, 1996  compared to 2,400 at September  30, 1995.  The
       average  price per jewelry unit sold was  relatively  unchanged at $22.72
       for the three months ended  September 30, 1996 compared to $22.90 for the
       three months ended September 30, 1995.

       Gross profit  increased  $3.8 million,  or 38%, from $9.9 million for the
       three  months  ended  September  30, 1995 to $13.7  million for the three
       months  ended  September  30, 1996.  The  Company's  gross profit  margin
       decreased  from 42.9% for the three  months ended  September  30, 1995 to
       42.3% for the three months  ended  September  30,  1996.  The increase in
       gross profit dollars was attributable primarily to the Company's increase
       in net sales.  The decrease in the Company's gross profit margin reflects
       a lower gross profit on merchandise  sold,  partially offset by decreases
       in rent and occupancy expenses as a percentage of net sales. The decrease
       in gross profit margin  reflects the Company's  efforts to provide better
       customer value and increase  dollar and unit sales.  The decrease in rent
       and occupancy as a percentage of net sales reflects the fact that despite
       the  increase  in net sales,  many  stores were below the points at which
       percentage rents would have been required. Additionally, relatively fixed
       common area  maintenance,  mall  advertising  and other costs were spread
       over a higher level of net sales.

       Selling,  general and administrative  expenses increased $4.0 million, or
       42%,  from $9.5 million for the three 

                                       8
<PAGE>

       months  ended  September  30, 1995 to $13.5  million for the three months
       ended September 30, 1996. As a percentage of net sales, selling,  general
       and  administrative  expenses  increased  from 41.4% for the three months
       ended  September  30, 1995 to 41.5% for the three months ended  September
       30,  1996.  The  increase in dollars was  attributable  primarily  to the
       increase  in the  number  of  stores  and the  pre-opening  costs for new
       stores,  as well as higher  supervisory  and  administrative  expenses to
       support the current and expected growth in stores.  Selling,  general and
       administrative  expenses  increased as a  percentage  of net sales due to
       higher  expenses  associated  with  new  store  growth  and  an  improved
       incentive package for store personnel implemented in the third quarter of
       fiscal 1996.  Depreciation  and amortization  expense  increased 11% from
       $771,000 for the three months  ended  September  30, 1995 to $858,000 for
       the three  months  ended  September  30,  1996 due  primarily  to capital
       expenditures  for  new  stores,  the  upgrading  of  kiosks  in  existing
       locations and the expansion of the Company's  corporate  headquarters and
       distribution center completed in fiscal 1996.

       Interest expense increased $176,000,  or 57%, from $311,000 for the three
       months  ended  September  30, 1995 to $487,000 for the three months ended
       September 30, 1996, and as a percentage of net sales  increased from 1.4%
       for the  three  months  ended  September  30,  1995 to 1.5% for the three
       months ended September 30, 1996. The increase in interest expense was due
       primarily to higher average  balances on the Company's  revolving line of
       credit  agreement,  an  increase  in fees paid under the  Company's  gold
       consignment  arrangements  due to a greater  number of ounces  consigned,
       outstanding  long-term debt of $2.9 million issued in connection with the
       expansion  of  the  Company's  corporate  headquarters  and  distribution
       facility in the prior fiscal year.

       As a result of the foregoing,  the Company's net income fell from $45,000
       for the three months ended  September  30, 1995 to a net loss of $105,000
       for the three months ended September 30, 1996.

Six months ended September 30, 1996 and 1995

       Consolidated  net sales  increased  $17.3  million,  or 38%,  from  $45.4
       million for the six months ended  September 30, 1995 to $62.7 million for
       the six months ended  September 30, 1996. This increase was primarily due
       to an increase  in the  average  number of stores open for the six months
       ended  September  30, 1996 as compared to the six months ended  September
       30, 1995 and a $3.0  million,  or 7%,  increase in  comparable  store net
       sales.  There  were a total of 565  stores  open at  September  30,  1996
       compared to 416 at September  30,  1995,  an increase of 36%. The average
       jewelry  units  sold per store  increased  4% to 4,900 for the six months
       ended  September  30,  1996  compared  to 4,700 for the six months  ended
       September 30, 1995.  The average price per jewelry unit sold increased 3%
       to $23.60 for the six months ended  September 30, 1996 compared to $22.90
       for the six months ended September 30, 1995.

       Gross profit  increased $7.3 million,  or 38%, from $19.2 million for the
       six months ended  September  30, 1995 to $26.5 million for the six months
       ended  September  30, 1996.  The Company's  gross profit margin  improved
       slightly from 42.2% for the six months ended  September 30, 1995 to 42.3%
       for the six months ended September 30, 1996. The increase in gross profit
       dollars  was  attributable  primarily  to the  Company's  increase in net
       sales.  The  increase in the  Company's  gross profit  margin  reflects a
       slightly lower

                                       9
<PAGE>

       gross profit on merchandise  sold,  offset by a reduction in sales to the
       Florida licensee relative to the total sales of the Company. Sales to the
       Florida  licensee  provide a lower gross  margin than the  Company's  own
       retail sales.

       Selling,  general and administrative  expenses increased $7.4 million, or
       40%,  from $18.5  million for the six months ended  September 30, 1995 to
       $25.9  million  for  the  six  months  ended  September  30,  1996.  As a
       percentage of net sales,  selling,  general and  administrative  expenses
       increased from 40.7% for the six months ended September 30, 1995 to 41.3%
       for the six months ended  September 30, 1996. The increase in dollars was
       attributable  primarily  to the  increase in the number of stores and the
       pre-opening  costs  for new  stores,  as well as higher  supervisory  and
       administrative  expenses to support the  current and  expected  growth in
       stores.  Selling,  general and  administrative  expenses  increased  as a
       percentage of net sales due to higher expenses  associated with new store
       growth and an improved incentive package for store personnel  implemented
       in the  third  quarter  of fiscal  1996.  Depreciation  and  amortization
       expense  increased  23%  from  $1.3  million  for  the six  months  ended
       September 30, 1995 to $1.6 million for the six months ended September 30,
       1996 due primarily to capital  expenditures for new stores, the upgrading
       of  kiosks in  existing  locations  and the  expansion  of the  Company's
       corporate headquarters and distribution center completed in fiscal 1996.

       Interest expense  increased  $397,000,  or 88%, from $451,000 for the six
       months  ended  September  30, 1995 to $848,000  for the six months  ended
       September 30, 1996, and as a percentage of net sales  increased from 1.0%
       for the six months  ended  September  30, 1995 to 1.4% for the six months
       ended  September  30,  1996.  The  increase in  interest  expense was due
       primarily to higher average  balances on the Company's  revolving line of
       credit  agreement,  an  increase  in fees paid under the  Company's  gold
       consignment  arrangements  due to a greater  number of ounces  consigned,
       outstanding  long-term debt of $2.9 million issued in connection with the
       expansion  of  the  Company's  corporate  headquarters  and  distribution
       facility in the prior fiscal year.

       As a result of the  foregoing,  the Company's net income  decreased  from
       $207,000  for the six months  ended  September  30, 1995 to a net loss of
       $70,000 for the six months ended September 30, 1996.

Liquidity and capital resources

       The  Company's  primary  on-going  capital  requirements  are to  fund an
       increase  in  inventory  and to fund  capital  expenditures  and  working
       capital (mostly  inventory) for new stores. The Company's primary sources
       of  liquidity  are funds  provided by  operations,  its gold  consignment
       program and bank borrowings.  Due to the seasonal nature of the Company's
       business,  outstanding  borrowings under its credit facilities  generally
       peak during the second and third fiscal quarters as the Company  finances
       inventory  purchases in advance of the year-end  holiday shopping season.
       At September 30, 1996,  the Company had  outstanding  borrowings of $17.2
       million under its revolving  line of credit and $2.9 million of long-term
       debt outstanding. In addition, the Company had consigned 65,000 ounces of
       gold under its gold  consignment  program valued at  approximately  $24.6
       million.

                                       10
<PAGE>

       Net cash used in operating activities was $6.6 million for the six months
       ended September 30, 1996 compared to $11.9 million for the same period in
       the prior year. Net cash used in operating  activities primarily reflects
       increases in inventory and deposits for merchandise  purchases to support
       newly opened stores and future scheduled store openings.

       Net cash used in investing  activities  was $5.0  million  during the six
       months ended  September 30, 1996 compared to $3.8 million  during the six
       months ended  September 30, 1995.  Net cash used in investing  activities
       primarily  reflects the addition of property,  fixtures and  equipment in
       connection with the opening of new stores.

       Net cash provided by financing  activities  was $12.0 million for the six
       months  ended  September  30,  1996  versus  $14.3  million  provided  by
       financing activities during the six months ended September 30, 1995. Cash
       provided by financing  activities  during the six months ended  September
       30, 1996 primarily reflects an increase in borrowings under the Company's
       revolving  line of credit  agreement to support the  increased  number of
       stores currently operating and anticipated new store openings.  Also, the
       Company obtained an additional $400,000 long term loan in connection with
       the expansion of the Company's  corporate  headquarters  and distribution
       facility in the prior fiscal year.

       On September 5, 1996, the Company's revolving credit facility was amended
       to extend the term of the  agreement  to October 31, 1996 and to increase
       the amount of funds available. The amended agreement provided for maximum
       borrowings  of  $50.0  million  with a cash  advance  sub-limit  of $30.0
       million.  This credit facility was further amended on October 18, 1996 to
       extend the term of the agreement to December 31, 1996 and to increase the
       borrowing  limit to $60.0  million,  with a $36.0  million  cash  advance
       sub-limit.  At September 30, 1996, the Company had $7.6 million available
       to be borrowed under its then existing  revolving credit facility and was
       in compliance  with covenants  contained in the agreement or had obtained
       appropriate  waivers.  The Company  believes that the expected cash flows
       from operations, its gold consignment program and bank borrowings will be
       sufficient  to fund  the  Company's  currently  anticipated  capital  and
       liquidity needs.

Seasonality

       The  Company's  business  is highly  seasonal.  Due to the  impact of the
       year-end holiday shopping season,  the Company  experiences a substantial
       portion  of its annual net sales and  profitability  in its third  fiscal
       quarter  (ending  December 31st).  The Company has generally  experienced
       lower net sales in each of the  first,  second and  fourth  quarters  and
       lower net income or net losses in each of those quarters.

       The Company's  results of operations  may also  fluctuate from quarter to
       quarter as a result of a variety of factors,  including  fluctuations  in
       the price of gold or gold consignment rates, the amount and timing of new
       store openings, the integration of such new stores into the operations of
       the Company and the net sales contributed by new stores.  The addition of
       a large number of new stores significantly  affects results of operations
       on a quarter-to-quarter basis.

                                       11

<PAGE>

Forward-Looking Statements

       The  Private  Securities  Litigation  Reform Act of 1995  provides a safe
       harbor  for  forward-looking  statements.  A number  of the  matters  and
       subject  areas  discussed  in  "Management's  Discussion  and Analysis of
       Financial  Condition  and  Results  of  Operations"  are not  limited  to
       historical or current facts and deal with potential future  circumstances
       and developments. Forward-looking statements include those related to the
       Company's  ability to fund  anticipated  capital and liquidity  needs.  A
       variety of factors  could cause the  Company's  actual  results to differ
       materially  from  the  expected   results   expressed  in  the  Company's
       forward-looking  statements. The risks and uncertainties which may affect
       the operation and results of the Company's business include,  but are not
       limited to, general  economic  conditions and the impact on discretionary
       spending  in the  geographic  areas  where a  significant  number  of the
       Company's  stores are  located,  fluctuations  in the price of gold,  the
       Company's  ability to finance its gold  merchandise  and the cost of such
       financing,  future  regulation  regarding  ear piercing  activities,  the
       ability to obtain favorable store locations on satisfactory  lease terms,
       the  Company's  ability to  finance  expansion  plans and  changes in the
       competitive environment in which the Company operates.

PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       On  September  18,  1996,  the  Registrant  held its  Annual  Meeting  of
       Stockholders. The stockholders approved the following proposals:

       To elect one  director  to hold office  until the 1999 Annual  Meeting of
       Stockholders and until his successor has been duly elected and qualified.

                  Director                  For                        Against

              John F. Eureyecko            4,660,816                     2,942

       To approve the Piercing Pagoda, Inc. Employee Stock Purchase Plan.

                  For                       Against                    Abstain

                 4,644,883                     9,522                     5,399

       To ratify  the  appointment  of KPMG Peat  Marwick  LLP as the  Company's
       independent auditors for the 1997 fiscal year.

                  For                       Against                    Abstain

                 4,662,358                       100                     1,300

                                       12
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a)   Exhibits

          3.1  Restated   Certificate   of   Incorporation   of  the  Registrant
               (incorporated  by  reference  to Exhibit 3.1 to the  Registrant's
               Registration Statement on Form S-1, File No. 33-80200,  initially
               filed with the  Securities  and Exchange  Commission  on June 14,
               1994).

          3.2  Amended and Restated  By-Laws of the Registrant  (incorporated by
               reference  to  Exhibit  3.2  to  the  Registrant's   Registration
               Statement on Form S-1, File No.  33-80200,  initially  filed with
               the Securities and Exchange Commission on June 14, 1994).

          4    Specimen Common Stock  Certificate  (incorporated by reference to
               Exhibit 4 to the Registrant's Registration Statement on Form S-1,
               File  No.  33-80200,  initially  filed  with the  Securities  and
               Exchange Commission on June 14, 1994).

          10.1 Third  Amendment  to Third  Amended and Restated  Loan  Agreement
               dated September 5, 1996 between the Registrant and Summit Bank.

          10.2 Eleventh Replacement  Revolving Loan Note dated September 5, 1996
               between the Registrant and Summit Bank.

          10.3 Fourth  Amendment to Third  Amended and Restated  Loan  Agreement
               dated October 18, 1996 between the Registrant and Summit Bank.

          10.4 Twelfth  Replacement  Revolving  Loan Note dated October 18, 1996
               between the Registrant and Summit Bank.

          11   Statement  regarding  computation  of net income per common share
               and common share equivalent.

     b)   Reports on Form 8-K

          During the quarter  ended  September  30, 1996, no reports on Form 8-K
          were filed.

                                       13
<PAGE>

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.




                                                  PIERCING PAGODA, INC.
                                                       (Registrant)



      Date:      November 12, 1996                /s/ John F. Eureyecko
                                                  ---------------------
                                                  John F. Eureyecko
                                                  President,
                                                  Chief Operating Officer
                                                  (Principal Financial Officer)



      Date:      November 12, 1996                /s/ Brandon R. Lehman
                                                  ---------------------
                                                  Brandon R. Lehman
                                                  Treasurer
                                                  (Principal Accounting Officer)


                                       14
<PAGE>



                                INDEX TO EXHIBITS

                                                                    Sequentially
     Exhibit                                                          Numbered
      Number                                                            Page

        10.1    Third Amendment to Third Amended and Restated Loan
                Agreement dated September 5, 1996 between the
                Registrant and Summit Bank.                               16

        10.2    Eleventh Replacement Revolving Loan Note dated
                September 5, 1996 between the Registrant and Summit
                Bank.                                                     20

        10.3    Fourth Amendment to Third Amended and Restated Loan
                Agreement dated October 18, 1996 between the
                Registrant and Summit Bank.                               23

        10.4    Twelfth Replacement Revolving Loan Note dated October
                18, 1996 between the Registrant and Summit Bank.          27

        11      Statement regarding computation of net income per
                common share and common share equivalent                  30

                                  15