Advance Auto Parts Reports Fourth Quarter and Annual Results.

ROANOKE, Va. -- Advance Auto Parts, Inc. (NYSE: AAP), a leading retailer of automotive aftermarket parts, accessories, batteries, and maintenance items, today announced its financial results for the fiscal fourth quarter and year ended December 30, 2006.

Earnings per diluted share for the fourth quarter were $0.33, compared to $0.36 last year. This year's fourth quarter results include $0.03 per share of stock-option expense, whereas last year's quarter does not include pro forma stock-option expense of $0.02 per share.

In the fourth quarter, sales increased to $1.02 billion from $964 million last year. Comparable-store sales increased 1.6% in the quarter, comprised of a 0.3% decrease in do-it-yourself (DIY) and a 7.9% increase in do-it-for-me (DIFM). The 1.6% comparable-store sales increase compares to a 6.3% increase in last year's fourth quarter.

"2006 proved to be a challenging year, as sales did not meet our expectations," said Mike Coppola, Chairman, President and CEO. "Our soft sales results hindered our ability to leverage expenses. We have embarked on a comprehensive assessment of our business, customers and capabilities, to better identify opportunities to allocate our capital and improve our performance."

Fourth quarter gross margin was 47.1% of sales, a 40 basis point improvement compared to last year's quarter, primarily reflecting improved procurement costs, ongoing category management initiatives and logistics efficiencies.

Fourth quarter selling, general and administrative (SG&A) expenses were 40.8% of sales, compared to 39.4% in fourth quarter 2005. This reflects approximately 70 basis points loss of leverage on rent, depreciation and other fixed costs from modest comparable-store sales. In addition, SG&A was unfavorably impacted by higher costs for workers' compensation and auto liability, which in total accounted for another 75 basis points. Non-comparable stock-option expense also increased SG&A in this year's quarter by 45 basis points. Reductions in several other cost items partly offset the expense increases.

2006 Annual Results

For the year, sales grew to $4.62 billion from $4.26 billion last year. Comparable-store sales increased 2.1% over this time, comprised of a 0.3% decrease in DIY and a 10.8% increase in DIFM. The 2.1% comparable-store sales increase compares to an 8.7% increase in 2005. Gross margin expanded by approximately 50 basis points to 47.7%, while SG&A grew 120 basis points to 38.9% of sales, inclusive of 40 basis points of non-comparable stock-option expense. Earnings per share for the year are $2.16 (inclusive of 11 cents of non-comparable stock-option expense), compared to $2.13 in 2005 (which did not include pro forma stock-option expense of nine cents).

Store Information

During the fourth quarter, the Company opened 53 new stores, of which seven were Autopart International (AI) stores. The Company also relocated 16 existing stores, and remodeled 12 stores to the innovative Advance 2010 format in the fourth quarter. For the year, the Company relocated 47 stores, remodeled 189 stores, closed five stores, and opened 215 new stores, of which 25 were AI locations; AI now operates 87 stores. As of December 30, 2006, 1,956 (or 65%) of the Company's Advance stores are 2010-format stores, and more than 81% of the Company's Advance stores offer commercial delivery programs.

"During this slower sales environment, we will invest in our store base at a more conservative pace in 2007 until we complete our re-assessment to determine how we can best allocate our capital going forward," Coppola said. "We have developed a lower-cost remodel program, which we believe can continue to drive sales improvements, while delivering a better return on investment. We also plan to open, remodel, and relocate fewer stores in 2007, which we believe will improve our SG&A and return on capital performance."

Guidance

The Company is basing its earnings guidance on comparable-store sales for the first quarter and the year in the low single-digit range. First quarter comparisons represent our most-challenging year-over-year sales comparison. Quarter-to-date results are running within that range. For the first quarter, the Company anticipates modest gross margin improvement, and a slowing rate of growth in SG&A as compared to the fourth quarter. The Company forecasts first-quarter 2007 earnings per diluted share in the range of $0.68 to $0.72, which compares to $0.68 in last year's first quarter. As previously disclosed, last year's first quarter earnings per share benefited by approximately two cents from the resolution of certain tax contingencies.

For 2007, the Company anticipates new-store growth in the 200-210 range, from the opening of both Advance and AI stores. In addition, the Company expects to remodel approximately 150 stores and relocate approximately 35 existing stores. With comparable-store sales gains in the low single-digit range for the year, the Company would expect top-line growth to be in the high single digits, with earnings growth in the 10% to 15% range (EPS of $2.38 to $2.48).

Dividend

On February 14, 2007, the Company's Board of Directors declared a regular quarterly cash dividend of six cents per share be paid on April 6, 2007 to stockholders of record as of March 23, 2007.

Investor Conference Call

The Company will host a conference call on February 15, 2007, at 8:00 a.m. Eastern Standard Time to discuss its quarterly results. To listen to the live call, please log on to the Company's Web site, www.AdvanceAutoParts.com, or dial (866) 908-1AAP. The call will be archived on the Company's Web site until February 14, 2008.

About Advance Auto Parts

Headquartered in Roanoke, Va., Advance Auto Parts is the second-largest retailer of automotive aftermarket parts, accessories, batteries, and maintenance items in the United States, based on store count and sales. As of December 30, 2006, the Company operated 3,082 stores in 40 states, Puerto Rico, and the Virgin Islands. The Company serves both the do-it-yourself and professional installer markets.

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, comparable-store sales, gross margin and SG&A rates, and earnings per share for first-quarter 2007 and fiscal year 2007. 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 31, 2005, 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.

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