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 June 30, 1997

                                       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
6,034,920 (as of August 11, 1997)


<PAGE>


                              PIERCING PAGODA, INC.


                                      INDEX
                                                                            PAGE
                        PART I - FINANCIAL INFORMATION               NUMBER

  Item 1.    Financial Statements

             Consolidated balance sheets as of
             June 30, 1997 and March 31, 1997                           3

             Consolidated statements of operations for the three
             months                                                     4
             ended June 30, 1997 and 1996

             Consolidated statements of cash flows for the  three
             months ended June 30, 1997 and 1996                        5

             Notes to consolidated financial statements                 7

  Item 2.    Management's discussion and analysis of financial
             condition and results of operations                        9

                           PART II - OTHER INFORMATION

     Item 1. Legal Proceedings                                         13

     Item 2. Changes in Securities                                     13

     Item 3. Defaults Upon Senior Securities                           13

     Item 4. Submission of Matters to a Vote of Security Holders       13

     Item 5.    Other Information                                      13

     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>
                                                       June 30,       March 31,
                                                         1997           1997
                                                      ------------   -----------
   Assets                                             (Unaudited)

Current assets
<S>                                                     <C>           <C>
   Cash                                                 $ 2,681       $ 4,119
   Accounts receivable                                    1,411         2,233
   Inventory                                             48,869        43,109
   Deposits for inventory purchases                         384           850
   Prepaid expenses and other current assets                863           757
   Prepaid income taxes                                   2,082         1,494
   Deferred tax assets                                    1,697         1,530

                                                      ------------   -----------
Total current assets                                     57,987        54,092

Property, fixtures and equipment, net                    24,258        22,572
Other assets                                              6,460         3,077

                                                      ============   ===========
                                                       $ 88,705      $ 79,741
                                                      ============   ===========
   Liabilities and Stockholders' Equity

Current liabilities
   Accounts payable                                     $ 6,509       $ 3,668
   Current installments of long-term debt                   234           234
   Accrued expenses and other current liabilities         9,346         9,541

                                                      ------------   -----------
Total current liabilities                                16,089        13,443

Long-term debt, less current installments                19,481        26,690
Deferred tax liabilities                                    183         1,550
Other liabilities                                           661           536

                                                      ------------   -----------
Total liabilities                                        36,414        42,219

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 5,933,620 shares and         60            53
   5,273,994
      at June 30, 1997 and March 31, 1997,
   respectively.
   Additional paid-in capital                            37,647        22,588
   Retained earnings                                     14,584        14,881

                                                      ------------   -----------
Total stockholders' equity                               52,291        37,522
                                                      ------------   -----------
                                                       $ 88,705      $ 79,741
                                                      ============   ===========
</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
                                                                        June 30,
                                                             -------------------
                                                                 1997       1996
                                                             --------  ---------

<S>                                                         <C>      <C>
Net sales                                                   $42,873  $ 30,244

Cost of goods sold and occupancy
expenses,                                                    24,766    17,463
    (excluding depreciation on
kiosks)
                                                             --------  ---------
Gross profit                                                 18,107    12,781

Selling, general and administrative
expenses,                                                    17,854    12,421
    (including depreciation on
kiosks)
                                                             --------  ---------
Income from operations                                          253       360

Interest and other income                                       103        60
Interest expense                                                843       361
                                                             --------  ---------
Earnings (loss) before income taxes                            (487)       59

Income tax expense (benefit)                                   (190)       24
                                                             ========  =========
Net (loss) income                                            $ (297)     $ 35
                                                             ========  =========

Earnings (loss) per share                                     $(0.05)  $ 0.01

                                                             ========  =========

Weighted average common shares and
 equivalent shares outstanding                                5,492     5,356
                                                             ========  =========
</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>
                                                          Three months ended
                                                               June 30,
                                                       -------------------------
                                                          1997          1996
                                                       ------------  -----------
<S>                                                       <C>        <C>
Cash flows from operating activities:
  Net income (loss)                                       $ (297)    $    35
  Adjustments to reconcile net income (loss)  to net
cash provided
   by (used in) operating activities:
     Depreciation and amortization                         1,221         781
     (Gain) loss on disposal of property, fixtures
       and equipment                                         (10)          -
     Other changes in other assets                           (32)         (9)
     Deferred income taxes                                   318           -
     Change in operating assets and liabilities
        net of effects of acquisitions:
      Accounts receivable                                    822           6
      Inventory                                           (3,393)     (4,688)
      Deposits for inventory purchases                       466      (1,936)
      Prepaid expenses and other current assets             (106)        173
      Prepaid income taxes                                  (552)        (82)
      Accounts payable                                     2,841       5,313
      Accrued expenses and other current liabilities        (255)       (535)
      Other liabilities                                     (115)         60

                                                       ------------  -----------
Net cash provided by (used in) operating activities          908        (882)

Cash flows from investing activities:
  Additions to property, fixtures and equipment           (2,284)     (2,518)
  Payments for purchase of businesses                     (7,904)          -
  Proceeds from disposal of property, fixtures and
   equipment                                                  38           -
  Noncurrent deposits, net                                   (17)         81

                                                       ------------  -----------
Net cash used in investing activities                    (10,167)     (2,437)

Cash flows from financing activities:
  Repayments of long-term debt                                (9)         (2)
  Revolving line of credit, net                           (7,200)      2,970
  Loan fees paid                                               -         (20)
  Proceeds from issuance of long-term debt                     -         400
  Net proceeds from issuance of common stock under
    employee share plans                                     128          85
  Proceeds from issuance of common stock, net             14,902           -

                                                       ------------  -----------
Net cash provided by financing activities                  7,821       3,433

                                                       ------------  -----------
Net increase (decrease) in cash                           (1,438)        114

Cash at beginning of period                                4,119       1,864

                                                       ============  ===========
Cash at end of period                                    $ 2,681     $ 1,978
                                                       ============  ===========
</TABLE>


                                       5
<PAGE>




                      PIERCING PAGODA, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          Three months ended
                                                               June 30,
                                                       -------------------------
                                                          1997          1996
<S>                                                        <C>         <C>
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
   Interest                                                $ 677       $ 297
                                                       ============  ===========
   Income taxes, net                                       $  80       $ 106
                                                       ============  ===========
</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  consolidated financial statements and notes
     thereto  for the year  ended  March 31,  1997.  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  period ended June 30, 1997 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>

                                                 June 30,      March 31,
                                                   1997           1997
                                              --------------  -----------
<S>                                              <C>          <C>
       Land                                       $ 688         $ 688
       Furniture and fixtures                     3,292         3,054
       Kiosks                                    21,616        19,832
       Building and improvements                  4,050         4,037
       Computer equipment, software and other
       equipment                                  8,041         7,396
                                              --------------  -----------
                                                 37,687        35,007
       Less accumulated depreciation and
       amortization                              13,429        12,435
                                              ==============  ===========
                                               $ 24,258       $ 22,572
                                              ==============  ===========
</TABLE>



                                       7
<PAGE>



Note 3            Accrued Expenses and Other Current Liabilities

     Accrued  expenses and other current  liabilities  are summarized as follows
     (in thousands):
<TABLE>
<CAPTION>

                                                 June 30,      March 31,
                                                   1997           1997
                                               -------------  -----------
<S>                                             <C>           <C>
       Accrued  payroll, vacation
        and related taxes                       $ 3,685       $ 4,160
       Sales tax payable                            765           704
       Accrued rents payable                        666         1,091
       Liability under jewelry club program         788           747
       Liability under lifetime guarantee
        program                                   1,261         1,211
       Other accrued expenses                     2,181         1,628
                                              ==============  ===========
                                                $ 9,346       $ 9,541
                                              ==============  ===========
</TABLE>


Note 4            Purchase of businesses

     In April 1997, the Company  purchased  substantially  all the operations of
     Silver and Gold Connection, Inc, an independent kiosk retailer ("Silver and
     Gold").  Silver  and Gold had  operated  approximately  46 kiosk  locations
     selling primarily gold and silver jewelry.  The purchase agreement provides
     for the payment of $4.7 million for the kiosk  locations,  leases and store
     fixtures.  The Company also acquired all of Silver and Gold's inventory for
     approximately  $2.8  million.  The excess of the net assets  acquired  over
     their  fair  value of  approximately  $3.0  million  has been  recorded  as
     goodwill  and is being  amortized  over 15 years.  In  connection  with the
     acquisition,  the Company entered into a non-competition agreement with the
     principal  stockholder of Silver & Gold which provides for annual  payments
     of  $60,000 to be made over a five year  period.  Also  during the  quarter
     ended June 30, 1997,  the Company  acquired two other kiosk  locations from
     unrelated third parties. The total purchase price for these acquisitions of
     $99,000 has been recorded as goodwill. The effect of these transactions was
     not material to the results of operations of the Company.

Note 5            Secondary Offering

     On June 30,  1997,  the Company  completed a secondary  offering of 650,000
     shares of its common stock. The transaction resulted in net proceeds (after
     offering expenses) to the Company of approximately  $14.9 million which was
     used to repay  indebtedness  under the Company's  revolving line of credit.
     Subsequently,  in July 1997,  the  underwriters  of the offering  exercised
     their  option to purchase  an  additional  97,500  shares of stock from the
     Company resulting in additional proceeds (after underwriting  discounts and
     commissions) to the Company of approximately $2.3 million.



                                       8
<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 June 30, 1997 and 1996

     Consolidated  net sales increased $12.7 million,  or 42% from $30.2 million
     for the three  months  ended June 30,  1996 to $42.9  million for the three
     months ended June 30, 1997.  This  increase was due  primarily to net sales
     generated  by new  stores  opened or  acquired  by the  Company  and a $1.7
     million,  or 6%, increase in comparable store net sales. There were a total
     of 749 stores open at June 30, 1997  compared to 535 at June 30,  1996,  an
     increase  of 40%. In  addition,  wholesale  sales to the  Florida  licensee
     increased  to  $878,000  for the  three  months  ended  June 30,  1997 from
     $336,000 in the three months ended June 30, 1997.  This  increase  reflects
     increased sales volume at the Florida Licensee's stores and the purchase of
     initial inventory for locations  purchased by the Florida Licensee from the
     Company in May 1997. The average jewelry units sold per store increased 16%
     to 2,900 for the three months ended June 30, 1997 compared to 2,500 at June
     30, 1996.  The average  price per jewelry unit sold  declined to $23.96 for
     the three  months  ended  June 30,  1997  compared  to $24.52 for the three
     months ended June 30, 1996. The increase in average  jewelry units sold and
     decrease in average  price per jewelry  unit  reflect  greater  promotional
     activity  during the period as compared to the previous  year.  The Company
     increased  promotions  in an  effort to  increase  unit  sales and  produce
     greater gross profit dollars.

     Gross profit  increased  $5.3  million,  or 41%, from $12.8 million for the
     three  months  ended June 30, 1996 to $18.1  million  for the three  months
     ended June 30,  1997.  The  Company's  gross profit  margin was  relatively
     unchanged  at 42.2% for the three  months  ended June 30, 1997 versus 42.3%
     for the three  months ended June 30, 1996.  Gross profit  margin  decreased
     slightly  due to an  increase in sales  activity  to the Florida  licensee.
     Wholesale sales to the Florida  licensee  produce a lower gross margin than
     the Company's own retail net sales.


                                       9
<PAGE>


     Selling,  general and administrative  expenses  increased $5.4 million,  or
     43%,  from $12.4  million for the three months ended June 30, 1996 to $17.8
     million for the three months ended June 30,  1997.  As a percentage  of net
     sales,  selling,  general and administrative  expenses increased from 41.1%
     for the three  months  ended  June 30,  1996 to 41.6% for the three  months
     ended June 30, 1997.  The increase in selling,  general and  administrative
     expenses as a percentage of net sales  primarily  reflects  higher expenses
     associated  with new stores  opened and acquired by the  Company.  This was
     partially  offset by improvements in corporate  overhead as a percentage of
     net sales,  reflecting leverage over a larger sales base.  Depreciation and
     amortization  expense  increased  54% to $1.2  million in the three  months
     ended June 30, 1997 from  $781,000 in the three  months ended June 30, 1996
     due primarily to capital  expenditures  for new stores and the upgrading of
     kiosks in existing locations.

     Interest expense increased  $482,000,  or 133%, from $361,000 for the three
     months  ended June 30, 1996 to $843,000 for the three months ended June 30,
     1997,  and as a percentage of net sales  increased  from 1.2% for the three
     months  ended  June 30,  1996 to 2.0% for the three  months  ended June 30,
     1997. The increase in interest  expense was due primarily to higher average
     balances on the Company's  revolving line of credit agreement,  principally
     to fund  recent  acquisitions  and an  increase  in the  number  of  ounces
     consigned under the Company's gold consignment arrangements.

     As a result of the  foregoing,  the  Company's  net  income  declined  from
     $35,000 for the three  months ended June 30, 1996 to a net loss of $297,000
     for the three months ended June 30, 1997.

Liquidity and capital resources

     The Company's primary ongoing short-term capital  requirements have been to
     fund an increase in inventory and to fund capital  expenditures and working
     capital  (mostly  inventory)  for new and acquired  stores.  The  Company's
     long-term liquidity  requirements relate principally to the maturity of its
     long-term  debt in July of 2000,  operating  lease  commitments  and  store
     expansion.  The  Company's  primary  sources of  liquidity  have been funds
     provided from operations,  a gold consignment program,  bank borrowings and
     in June 1997, an offering of the Company's  common stock. On June 30, 1997,
     the  Company  completed a public  offering of 650,000  shares of its common
     stock. The transaction  resulted in net proceeds (after offering  expenses)
     to the  Company  of  approximately  $14.9  million  which was used to repay
     indebtedness under the Company's revolving line of credit. Subsequently, in
     July 1997,  the  underwriters  of the  offering  exercised  their option to
     purchase an additional 97,500 shares of stock from the Company resulting in
     additional proceeds (after  underwriting  discounts and commissions) to the
     Company of  approximately  $2.3  million.  The  Company's  working  capital
     increased to $41.9  million at June 30, 1997 from $14.8 million at June 30,
     1996.  At June 30, 1997,  the Company had  outstanding  borrowings of $17.0
     million  under its  revolving  line of credit and $2.7 million of long-term
     debt outstanding,  including $234,000 classified as a current liability. In
     addition,  the Company had  consigned  92,677 ounces of gold under its gold
     consignment program valued at approximately $31.0 million.


                                       10
<PAGE>


     Net cash provided by operating activities was $908,000 for the three months
     ended June 30, 1997  compared to net cash used by operating  activities  of
     $882,000  for the same  period  in the prior  year.  Net cash  provided  by
     operating  activities  primarily  reflects  increases  in  liabilities,   a
     reduction in accounts  receivable and inventory  deposits;  and adjustments
     for  depreciation  and  amortization.  These  were  partially  offset by an
     increase in inventory to stock newly acquired and opened stores.

     Net cash used in investing  activities  was $10.2 million  during the three
     months ended June 30, 1997 compared to $2.4 million during the three months
     ended  June 30,  1996.  Net cash  used in  investing  activities  primarily
     reflects the purchase of  substantially  all the  operations  of Silver and
     Gold  Connection  in April 1997 and the addition of property,  fixtures and
     equipment in connection  with the opening of new stores and the  renovation
     of existing stores.

     Net cash  provided by financing  activities  was $7.8 million for the three
     months  ended June 30,  1997 versus $3.4  million  during the three  months
     ended June 30, 1996.  On June 25, 1997,  the Company  completed a secondary
     offering of its common stock,  raising net proceeds of approximately  $14.9
     million which was used to repay a portion of existing indebtedness.

     The Company's  revolving credit facility provides for maximum borrowings of
     $75.0 million  through a combination of cash advances (which may not exceed
     $45  million)  and letters of credit  (which may not exceed $55 million) to
     support the Company's gold consignment financing program. At June 30, 1997,
     the Company had $25.9 million  available to be borrowed under its revolving
     credit  facility  and was in  compliance  with  covenants  contained in the
     agreement.   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  fluctuate  significantly  from
     quarter  to  quarter  as  a  result  of a  variety  of  factors,  including
     fluctuations  in the price of gold,  the amount and timing of  acquisitions
     and new store  openings,  the  integration  of recently  acquired and newly
     opened stores into the operations of the Company, the timing of promotions,
     and changes in national and regional economic conditions.

                                       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.  Prospective
     investors  are  cautioned  that such  forward-looking  statements  are only
     predictions  and that  actual  events or results may differ  materially.  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,  including,  without limitation: the Company's
     ability  to  secure   suitable  store  sites  on  a  timely  basis  and  on
     satisfactory  terms;  the  Company's  ability  to hire,  train  and  retain
     qualified personnel, the availability of adequate capital resources and the
     successful   integration   of  new  stores  into  the  Company's   existing
     operations;  the Company's  ability to  successfully  implement and improve
     management  information systems,  procedures and controls on a timely basis
     and in such a manner as is necessary to accommodate the increased number of
     transactions  and  customers  and  the  increased  size  of  the  Company's
     operations;  fluctuations in quarterly net sales, and, in particular, third
     quarter net sales;  fluctuations  in gold prices;  competitive  conditions;
     economic   conditions   affecting   disposable  consumer  income,  such  as
     employment,  business conditions,  interest rates and taxation,  as well as
     trends  with  respect to mall  shopping  generally  and the ability of mall
     anchor tenants and other  attractions to generate  customer  traffic in the
     vicinity of the Company's  stores;  and the possibility of the enactment of
     legislation,  or the  modification of existing or pending  legislation,  in
     jurisdictions  in which the Company  operates,  that would adversely affect
     the Company's ear piercing or other activities.

                                       12
<PAGE>



PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         There are no material legal proceedings against the Company

ITEM 2.     CHANGES IN SECURITIES

         None

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

         None

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

         None.

ITEM 5.     OTHER INFORMATION

         None.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      a)    Exhibits

            10.41 Asset  Purchase  Agreement  dated  April  25,  1997  Between
                  Piercing  Pagoda,   Inc.  and  the  Silver  &  Gold  Trading
                  Company,  inc.  (incorporated  by reference to Exhibit 10.41
                  to the Registrant's  Registration Statement on Form S-1 File
                  No.  333-27213,  initially  filed  with the  Securities  and
                  Exchange Commission on May 15, 1997).

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

            27    Financial Data Schedule.

      b)    Reports on Form 8-K

            During the quarter  ended June 30, 1997, 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:  August 14, 1997               /s/ John F. Eureyecko
                                          ---------------------
                                          John F. Eureyecko
                                          President,
                                          Chief Operating Officer
                                          (Principal Financial Officer)



     Date:  August 14, 1997               /s/ Brandon R. Lehman
                                          ---------------------
                                          Brandon R. Lehman
                                          Treasurer
                                          (Principal Accounting Officer)


                                       14
<PAGE>



                                INDEX TO EXHIBITS
                                                                    Sequentially
  Exhibit                                                           Numbered
   Number                                                             Page

     11      Statement regarding computation of net loss per
             common share and common share equivalent                  16

     27      Financial Data Schedule                                   17




                                       15
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Exhibit   11 - Statement regarding  computation of net loss per common share and
          common share equivalent.


(In thousands, except per share data)                              Three months
                                                                  ended June 30,
                                                                            1997
                                                                  --------------

Average shares outstanding                                             5,321
Net effect of dilutive stock options, based
   on the treasury stock method                                          171

                                                                   =============
Total shares used in computation                                       5,492
                                                                   =============

Net loss                                                              $ (297)
                                                                   =============
Net loss per common share and
   common share equivalent                                            $ (0.05)
                                                                   =============

                                       16