Q: What did one pencil say to the other pencil?
A: You’re looking sharp!
Explanation: When the writing end of a pencil is pointed, we say that the pencil is sharp (the non-writing end is the eraser).
When someone is wearing nice clothes we say that the person is looking sharp; it is a phrase used most often to describe men. “Looking sharp” can also be used for someone doing something well as in this news article about a soccer player.
This joke is funny because it plays with the double meaning of “looking sharp.”
Here is Joe Jackson singing about looking sharp:
And Gillette with Look Sharp, Be Sharp: