Advance Auto Parts Fourth Quarter

Fourth quarter and fiscal 2008 results include the impact of an additional fiscal week of business (53^rd week) as well as a non-cash inventory adjustment resulting from a change in inventory management and related accounting policy for slow moving inventory. With this change in inventory management, the Company expects to add faster moving custom mix inventory which should increase inventory turns, accelerate sales and improve margins. As a result of the inclusion of the 53^rd week and the non-cash inventory adjustment, the Company’s fiscal fourth quarter and fiscal 2008 financial results are not comparable with prior periods. Thus, the Company’s fiscal 2008 financial results have been presented in this press release on both a generally accepted accounting principles (GAAP) basis and on a comparable basis to exclude the 53^rd week and the non-cash inventory adjustment that occurred in the fourth quarter of fiscal 2008.

Higher sales and improved gross profit rate in the 53^rd week added approximately $0.10 to diluted earnings per share (EPS) versus our previous estimate of $0.07. The non-cash inventory adjustment decreased diluted EPS by $0.25 for the fourth quarter and fiscal 2008.

The Company’s operating performance during the fourth quarter including the 53^rd week of business but excluding the non-cash inventory adjustment was $0.51 versus $0.35 for the same period last year. On a comparable 12-week basis, fourth quarter fiscal 2008 EPS of $0.41 increased 17% over the same period last year driven by increased operating income, reduced interest expense and a lower share count. On a GAAP basis, fourth quarter fiscal 2008 EPS was $0.26.

The Company’s operating performance during fiscal 2008 including the 53^rd week of business but excluding the non-cash inventory adjustment was $2.75 versus $2.28 for the same period last year. On a comparable 52-week basis, fiscal 2008 EPS of $2.65 increased 16% over the same period last year. On a GAAP basis, fiscal 2008 EPS was $2.50. The Company has provided a reconciliation of its financial results as reported on a GAAP basis to its comparable financial results, which excludes the 53^rd week and the non-cash inventory adjustment, in the accompanying financial statements below.

Fourth Quarter and Fiscal 2008 Highlights

Total sales for the fourth quarter increased 13.7% to $1.19 billion, compared with total sales of $1.05 billion in the fourth quarter of fiscal 2007. The sales increase reflects the net addition of 107 new stores during fiscal 2008, an increase of $88.8 million or 8.5% in sales due to the inclusion of a 53^rd week and a comparable store sales increase of 3.0% during the quarter. The comparable store sales increase of 3.0% compares to a decrease of 0.3% in the fourth quarter last year. The comparable store sales increase was comprised of a 13.7% increase in Commercial sales partially offset by a 1.1% decrease in do-it-yourself (DIY) sales. This compares to an 8.1% increase in Commercial sales and a 3.1% decrease in DIY sales in the fourth quarter last year. Fiscal 2008 sales increased 6.1% to $5.14 billion, while comparable store sales increased 1.5% driven by a 12.1% increase in Commercial sales partially offset by a 2.3% decrease in DIY sales.

On a comparable basis, the Company’s gross profit rate was 48.5% in the fourth quarter as compared to 47.1% for the same quarter last year, a 140 basis point improvement. The 140 basis point improvement was driven by decreased inventory shrink, more effective pricing and higher sales from Autopart International, which generated a higher gross profit rate. On a GAAP basis, the Company’s gross profit rate was 45.4% in the fourth quarter as compared to 47.1% for the same quarter last year, which reflects a 166 basis point decrease due to the impact of the non-cash inventory adjustment.

On a comparable basis, the Company’s fiscal 2008 gross profit rate was 48.6% as compared to 47.9% last year, which reflects a 70 basis point improvement. The 70 basis point improvement was driven by more effective pricing, decreased inventory shrink and higher sales from Autopart International, which generated a higher gross profit rate. On a GAAP basis, the Company’s gross profit rate was 47.9% in fiscal 2008, which was flat with the prior year.

On a comparable basis, the Company’s fourth quarter selling, general and administrative (SG&A) expenses were 42.3% of sales compared to 41.0% for the same period last year. The 125 basis point SG&A increase was driven by increased incentive compensation, strategic capability investments, and legal settlement costs partially offset by lower medical expense. On a GAAP basis, the Company’s fiscal fourth quarter SG&A expenses were 41.5% of sales, 77 basis points lower as a result of the 53^rd week.

On a comparable basis, the Company’s fiscal 2008 SG&A expenses were 40.0% of sales compared to 39.3% last year. The 66 basis point SG&A increase was driven by strategic capability investments, increased incentive compensation and legal settlement costs partially offset by lower medical expense. On a GAAP basis, the Company’s fiscal 2008 SG&A expenses were 39.8% of sales, 14 basis points lower as a result of the 53^rd week.

Interest expense was $7.5 million in the fourth quarter, compared to $8.2 million for the same period last year primarily driven by lower interest rates. For fiscal 2008, interest expense was $33.7 million, compared to $34.8 million last year driven by lower interest rates. The Company’s current borrowing costs are approximately 4%.

Operating cash flow for the year increased $68.2 million to $478.7 million. Free cash flow for the year increased 19% to $280.0 million, a $45.6 million improvement as compared to last year due to the impact of the 53^rd week and reduced capital expenditures. Capital expenditures were $185.0 million for the year, as compared to $210.6 million for the same period last year. The decrease in capital expenditures is primarily due to a reduction in new store development.

“Overall, I am very pleased with our performance in 2008. Despite a deteriorating economic environment, our turnaround and transformation are off to a good start. We achieved many strategic and financial goals in 2008,” said Darren R. Jackson, Chief Executive Officer. “These achievements were driven by the hard work and dedicated efforts of our 48,000 Team Members who helped us grow our Company’s success and serve our customers better than anyone else.”

The Company continues to focus on four key strategies to turn around the business – DIY Transformation, Commercial Acceleration, Availability Excellence and Superior Experience. These strategies are focused on what the Company believes matters most to the customer.

• Commercial Acceleration – Serving Commercial Customers better than anyone else through superior delivery times, order accuracy and parts availability

• DIY Transformation – Serving Retail Customers better than anyone else by providing products, services and support tailored to local market needs

• Availability Excellence – Delivering the right parts to the right place at the right time – every time

• Superior Experience – Consistently providing “Legendary Customer Service” through a relentless focus on execution

2008 Store Information

During the fourth quarter, the Company opened 26 AAP stores. The Company also closed 10 stores and relocated 2 stores. During fiscal 2008, the Company opened 127 stores, including 18 Autopart International stores, closed 20 stores and relocated 10 stores. As of January 3, 2009, the Company’s total store count was 3,368.

“We are pleased with our Commercial results and encouraged by the improvement in our DIY results during the fourth quarter. We believe we have significant growth opportunities given we have less than 3% Commercial market share. We are committed to aggressively growing our business. Despite the broader economic challenges, we believe we can continue to achieve double-digit Commercial comparable store sales growth in 2009 and we remain focused on improving our DIY comparable store sales trends,” said Jim Wade, President.

2009 Rent Renegotiations and Anticipated Store Divestitures

The Company recently completed a thorough examination of its real estate store portfolio based on profitability, cash flow, strategic market importance, operating income, store sales potential and current rent rates. The Company believes that its current occupancy costs for its leased store portfolio are uncompetitive due to the recent downturn in commercial lease rates. In addition, an unprecedented amount of retail store closings has provided the Company significant opportunities to improve its store portfolio. As a result, the Company intends to aggressively renegotiate rents and relocate or close existing stores to improve profitability. The Company is assessing the potential divestiture of an incremental 40 to 55 unprofitable stores in 2009 that are strategically or financially delivering unacceptable results.

2009 Annual Financial Outlook

The Company has provided an annual financial outlook and certain key assumptions taken into account by management. The 2009 Annual Financial Outlook excludes the impact related to the potential incremental 40 to 55 store divestures in 2009. In addition, fiscal 2009 includes 52 weeks versus 53 weeks in fiscal 2008. The 53^rd week of business in 2008 contributed $88.8 million in revenue, $15.8 million in operating income and $0.10 of diluted EPS.

In 2009, the Company anticipates a double-digit increase in Commercial comparable store sales, partially offset by a low single-digit decrease in DIY comparable store sales. The Company assumes a modest increase in the gross profit rate driven by continued decreases in inventory shrink and a favorable revenue mix in Autopart International, which generates a higher gross profit rate.

The Company’s SG&A rate is expected to increase due to continued strategic capability investments, dual operating expenses as a result of the build out of the Company’s infrastructure in areas such as local area warehouses, new systems, investments in new stores and inflation partially funded by SG&A expense reductions. As a result of the continued investments to grow the business, the Company anticipates that the SG&A rate will leverage at a 3% increase in comparable store sales.

For fiscal 2009, the Company assumes that each 1% increase in comparable store sales from the Company’s fiscal 2008 52 week EPS results of $2.65 adds approximately $0.07 in EPS. In addition, a 10 basis point improvement in operating margin is expected to add approximately $0.03 in EPS.

“The annual financial key assumptions for the 2009 fiscal year are based on the prevailing economic environment and reflect where the Company is in the turnaround,” said Mike Norona, Executive Vice President and Chief Financial Officer. “However, we remain focused on achieving higher levels of long-term sales and earnings growth fueled by our continued strategic capability investments.”

Dividend

On February 17, 2009, the Company’s Board of Directors declared a regular quarterly cash dividend of six cents per share to be paid on April 10, 2009 to stockholders of record as of March 27, 2009.

Investor Conference Call

The Company will host a conference call on Thursday, February 19, 2009 at 10:00 a.m. Eastern Standard Time to discuss its quarterly results. To listen to the live call, please log on to the Company’s website, www.AdvanceAutoParts.com, or dial (866) 908-1AAP. The call will be archived on the Company’s website until February 19, 2010.

About Advance Auto Parts

Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading automotive aftermarket retailer of parts, accessories, batteries, and maintenance items in the United States, serves both the do-it-yourself and professional installer markets. As of January 3, 2009, the Company operated 3,368 stores in 40 states, Puerto Rico, and the Virgin Islands. Additional information about the Company, employment opportunities, customer services, and online shopping for parts and accessories can be found on the Company’s website at www.AdvanceAutoParts.com.

Certain statements contained in this release are forward-looking statements, as that statement is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events or developments, and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook or estimate. These statements discuss, among other things, expected growth and future performance, including store growth, capital expenditures, comparable store sales, SG&A, operating income, gross profit rate, free cash flow, profitability and earnings per diluted share for fiscal year 2009. These forward-looking statements are subject to risks, uncertainties and assumptions including, but not limited to, competitive pressures, demand for the Company’s products, the market for auto parts, the economy in general, inflation, consumer debt levels, the weather, acts of terrorism, availability of suitable real estate, dependence on foreign suppliers and other factors disclosed in the Company’s 10-K for the fiscal year ended December 29, 2007, as updated in the 10-Q for the third quarter ended October 4, 2008, on file with the Securities and Exchange Commission. Actual results may differ materially from anticipated results described in these forward-looking statements. The Company intends these forward-looking statements to speak only as of the time of this news release and does not undertake to update or revise them, as more information becomes available.

-Financial Tables to Follow-

Advance Auto Parts, Inc.
Shelly Whitaker, APR
Direct: 540-561-8452
Fax: 540-561-6445
shelly.whitaker@advanceautoparts.com