The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that appear elsewhere in this report. Our first quarter consists of 16 weeks divided into four equal periods. Our remaining three quarters consist of 12 weeks with each quarter divided into three equal periods. Fiscal 2008 was an exception to this rule with the fourth quarter containing 13 weeks due to our 53-week fiscal year.

Certain statements in this report are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are usually identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "plan," "position," "possible," "potential," "probable," "project," "projection," "should," "strategy," "will," or similar expressions. We intend for any forward-looking statements to be covered by, and we claim the protection under, the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based upon assessments and assumptions of management in light of historical results and trends, current conditions and potential future developments that often involve judgment, estimates, assumptions and projections. Forward-looking statements reflect current views about our plans, strategies and prospects, which are based on information currently available.

Although we believe that our plans, intentions and expectations as reflected in or suggested by any forward-looking statements are reasonable, we do not guarantee or give assurance that such plans, intentions or expectations will be achieved. Actual results may differ materially from our anticipated results described or implied in our forward-looking statements, and such differences may be due to a variety of factors. Our business could also be affected by additional factors that are presently unknown to us or that we currently believe to be immaterial to our business.

Listed below and discussed in our Annual Report on Form 10-K for the year ended January 3, 2009 (filed with the Securities and Exchange Commission, or SEC, on March 4, 2009), or 2008 Form 10-K, are some important risks, uncertainties and contingencies which could cause our actual results, performance or achievements to be materially different from any forward-looking statements made or implied in this report. These include, but are not limited to, the following:

· a decrease in demand for our products;

· deterioration in general economic conditions, including unemployment, inflation, consumer debt levels, energy costs and unavailability of credit leading to reduced consumer spending on discretionary items;

· our ability to develop and implement business strategies and achieve desired goals;

· our ability to expand our business, including locating available and suitable real estate for new store locations and the integration of any acquired businesses;

· competitive pricing and other competitive pressures;

· our overall credit rating, which impacts our debt interest rate and our ability to borrow additional funds to finance our operations;

· deteriorating and uncertain credit markets could negatively impact our merchandise vendors, as well as our ability to secure additional capital at favorable (or at least feasible) terms in the future;

· bankruptcies of auto manufacturers, which will likely have an impact on the operations and cash flows of our auto parts suppliers;

· our relationships with our vendors;

· our ability to attract and retain qualified Team Members;

· the occurrence of natural disasters and/or extended periods of unfavorable weather;

· our ability to obtain affordable insurance against the financial impacts of natural disasters and other losses;

· high fuel costs, which impact our cost to operate and the consumer's ability to shop in our stores;

· regulatory and legal risks, such as environmental or OSHA risks, including being named as a defendant in administrative investigations or litigation, and the incurrence of legal fees and costs, the payment of fines or the payment of sums to settle litigation cases or administrative investigations or proceedings;

· adherence to the restrictions and covenants imposed under our revolving and term loan facilities; and

· acts of terrorism.

We assume no obligations to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In evaluating forward-looking statements, you should consider these risks and uncertainties, together with the other risks described from time to time in our other reports and documents filed with the SEC and you should not place undue reliance on those statements.

Introduction

We primarily operate within the United States automotive aftermarket industry, which includes replacement parts (excluding tires), accessories, maintenance items, batteries and automotive chemicals for cars and light trucks (pickup trucks, vans, minivans and sport utility vehicles). We currently are the second largest specialty retailer of automotive parts, accessories and maintenance items to "do-it-yourself," or DIY, and Commercial customers in the United States, based on sales. Our Commercial customers consist of both walk-in and delivery customers. For delivery sales, we utilize our Commercial delivery fleet to deliver product from our store locations to our Commercial customers' places of business, including independent garages, service stations and auto dealers. At October 10, 2009, we operated a total of 3,418 stores.

We operate in two reportable segments: Advance Auto Parts, or AAP, and Autopart International, Inc., or AI. The AAP segment is comprised of our store operations within the United States, Puerto Rico and the Virgin Islands which operate under the trade names "Advance Auto Parts," "Advance Discount Auto Parts" and "Western Auto." At October 10, 2009, we operated 3,267 stores in the AAP segment, of which 3,239 stores operated under the trade names "Advance Auto Parts" and "Advance Discount Auto Parts" throughout 39 states in the Northeastern, Southeastern and Midwestern regions of the United States. These stores offer automotive replacement parts, accessories and maintenance items. In addition, we operated 28 stores under the "Western Auto" and "Advance Auto Parts" trade names, located in Puerto Rico and the Virgin Islands.

The AI segment consists solely of the operations of AI, which operates as an independent, wholly-owned subsidiary. AI's business primarily serves the Commercial market from its store locations throughout the Northeast and recent expansion into the Southeast. In addition, its North American Sales Division services warehouse distributors and jobbers throughout North America. At October 10, 2009, we operated 151 stores in the AI segment under the "Autopart International" trade name. For additional information regarding our segments, see Note 15, Segments and Related Information, of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Management Overview

During our third quarter and year-to-date for fiscal 2009, we produced favorable financial results primarily due to top-line sales growth and strong gross profit improvement resulting in earnings per diluted share of $0.65 and $2.46, respectively, compared to $0.58 and $2.23 for the third quarter and year-to-date 2008, respectively. Our earnings per diluted share for 2009 included the impact of a $0.04 and $0.15 charge related to expenses associated with our store divestiture plan for the third quarter and year-to-date, respectively. We also continued to make strategic investments in our four key strategies and paid down a significant portion of our bank debt.

Third Quarter Highlights

Highlights from our third quarter of fiscal 2009 include:

Financial

· Total sales during the third quarter of fiscal 2009 increased 6.3% to $1.26 billion as compared to the third quarter of fiscal 2008, primarily driven by a comparable store sales increase of 4.7%.

· Our gross profit rate increased 190 basis points as compared to the third quarter of fiscal 2008.

· Our SG&A rate increased 167 basis points as compared to the third quarter of fiscal 2008 partially due to 56 basis points of store divestiture expenses. Excluding store divestitures, this increase in SG&A is primarily linked to the targeted investments we are making to support each of our four key strategies which have already begun to yield short-term benefits in our sales and gross profit results.

· We generated operating cash flow of $628.5 million through the third quarter of fiscal 2009, an increase of 67% over the comparable period in fiscal 2008, and used available operating cash to pay down $176.5 million of outstanding bank debt and repurchase 1.2 million shares of our common stock at a cost of $49.6 million.

General

· Our continuous improvements in customer satisfaction and Team Member engagement scores, renewed focus on core values and ongoing initiatives within each of our key strategies were equally important in driving our favorable financial results for the quarter.

· We launched our new e-commerce website which offers more than 100,000 parts and accessories.

· We continued to make progress towards our goal of obtaining investment grade ratings based on our increased profitability and cash flow and strength of our balance sheet.

Store Divestiture Plan

For fiscal 2009, we expect to divest a total of approximately 40 to 50 stores that are delivering strategically or financially unacceptable results. These closures are in addition to an estimated 15 stores that we will close as part of our routine review and closure of underperforming stores at or near the end of their respective lease terms. During the twelve and forty weeks ended October 10, 2009, we recognized expense of $7.1 million and $22.2 million, respectively, comprised primarily of closed store exit costs in connection with the divestiture plan. During the third quarter of fiscal 2009, we closed 13 stores, 12 of which were closed under our store divestiture plan. We have closed 43 stores during the first three quarters of fiscal 2009, 36 of which were related to our divestiture plan. We anticipate recognizing expenses of approximately $0.15 to $0.22 per diluted share for the entire fiscal 2009 in connection with the closure of stores under the store divestiture plan. The majority of this expense is related to the estimated remaining lease obligations at the time of the anticipated closures.

Key Strategies

We continue to make significant investments in each of our four key strategies with the ultimate focus on the customer and growth in our business. The principal focus of our turnaround plan has been on Commercial Acceleration and Availability Excellence to accelerate our growth and profitability. We have made strategic choices to fund investments in each of these strategies and will balance our investments between Commercial and DIY over the long term as well as the necessary support through our Superior Experience strategy. Updates from each of our four key strategies are provided below.

††† Commercial Acceleration

Our Commercial comparable store sales increase was 11.8% during the third quarter of fiscal 2009, our seventh consecutive quarter of double-digit comparable store sales growth. Our Commercial sales, as a percentage of total sales, increased 214 basis points to 32.4% for the third quarter of fiscal 2009 as compared to the third quarter of the prior year. We believe our consistent growth in Commercial sales and market share is being driven in part by the investments we have made over the last year and continue to make under our Commercial Acceleration strategy. By the end of 2009, we will have made investments in parts, key brands, and additional parts professionals, delivery trucks and drivers in approximately one-third of our stores. We have also increased our Commercial sales force by 50% from the beginning of 2009. We continue to make progress in aligning our staffing model in preparation for a 50/50 Commercial and DIY sales mix as well as improving the overall delivery experience.

††† DIY Transformation

Our third quarter DIY comparable store sales increase of 1.7% marks our third consecutive positive increase despite lower DIY investments. The industry continues to benefit from increased customer traffic as consumers are saving money by maintaining their existing vehicles rather than replacing them and miles driven have also started to increase again. Although industry data reported by The NPD Group indicates the market grew slightly faster than we did during the third quarter of fiscal 2009, we believe we will reverse the current trend based on our recently revamped marketing programs and other initiatives underway in our DIY Transformation.

We have initiatives underway to address both the conversion rate of our existing customers as well as the consideration rate of potential customers. Conversion rate initiatives include the installation of traffic counters and updated phone systems to provide valuable information about the customer experience, improved staffing and targeting certain stores with specific research and sales development efforts to better solve our customers' problems and better leverage the parts availability and merchandising improvements we are making in our stores. Regarding consideration rate, we have made significant changes to our marketing program during the quarter. Our spending on DIY advertising will return to a higher level for the remainder of the year.

††† Availability Excellence

Our Availability Excellence strategy represents our commitment to enhance the breadth and depth of our parts availability in our stores, and the speed of our parts delivery, to better serve both our Commercial and DIY customers. In addition to our positive sales results, we believe our ongoing investments and initiatives under this strategy are driving our strong gross profit results. Our gross margin for the third quarter of fiscal 2009 increased 190 basis points over the third quarter of last year. During the third quarter, we made significant progress in capabilities to help drive our sales and gross profit growth, including the continued improvement in parts availability, the strengthening and development of a price optimization capability and implementation of the first phase of our core merchandising system. We also added two Parts Delivered Quickly warehouses, or PDQ®s, and 25 larger stores which stock a wider selection and greater supply of inventory, or HUB stores, to our supply chain network and completed the implementation of engineered standards in all eight of our distribution centers to improve productivity, increase efficiency and ultimately reduce distribution expenses.

We remain on track to completely dispose of the nonproductive inventory we identified in 2008 by the end of 2009. We continue to manage our inventory productivity by removing unproductive inventory from our store assortments through utilizing markdown strategies and our vendor return privileges. We expect to manage more effectively the growth in our inventory as compared to our sales growth. As of October 10, 2009, our inventory decreased 3.5% over the ending balance from third quarter of last year as compared to our sales growth of 6.3% during the third quarter of this year.

††† Superior Experience

Superior Experience is centered around our store operations and providing superior customer service. The successful rollout and completion of Commercial and DIY initiatives in our stores is greatly dependent on the Superior Experience strategy. The feedback from our customer satisfaction surveys, coupled with our Team Member

engagement surveys, provides the evidence of our continued focus and commitment to understand what our customers need and how to engage our team to fulfill that goal. We have a dedicated team of field operations leaders who are leading the rollout of initiatives over our entire store chain in a very disciplined and focused way. These initiatives include improving staffing, structuring operations to more effectively serve both Commercial and DIY customers, providing sales development and coaching and driving gross profit improvements through new battery warranty procedures, better pricing decisions and improved shrink control.

Change in Accounting Principle

We have retrospectively adjusted all comparable periods related to cost of sales and selling, general and administrative expenses, or SG&A, as a result of a change in accounting principle effective January 4, 2009. We changed our accounting for freight and other handling costs associated with transferring merchandise from our HUB stores and PDQ®s to our retail stores from recording such costs as SG&A to recording such costs in cost of sales. This change, which had no impact to operating income or cash flows, more accurately reflects the nature of the expense.

The net adjustment increasing cost of sales and decreasing SG&A for the twelve and forty weeks ended October 4, 2008 was $14.9 million and $48.1 million, respectively. For additional information regarding this change, see Note 2, Change in Accounting Principle, of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Industry

The automotive aftermarket industry remains sound despite the ongoing challenging macroeconomic conditions. Financial results from the leading automotive aftermarket companies suggest that the entire industry is benefiting from the economic downturn because consumers are keeping their vehicles longer, which in turn increases the average age of vehicles and the need to repair and complete routine maintenance on those vehicles. We believe we will continue to hold market share in the less fragmented DIY market as well continuing to significantly increase our market share in the Commercial market where our current market share is less than 5% of the $40 billion Commercial market.

We are pleased with our financial results through the third quarter of fiscal 2009. We remain committed to making the necessary investments to help ensure our long-term profitability and success through our transformation to become the industry leader.

Consolidated Operating Results and Key Statistics and Metrics

The following table highlights certain consolidated operating results and key
statistics and metrics for the twelve and forty weeks ended October 10, 2009 and
October 4, 2008, respectively, and fiscal years ended January 3, 2009 and
December 29, 2007. We use these key statistics and metrics to measure the
financial progress of our four key strategies.

                                    Twelve Weeks Ended               Forty Weeks Ended
                               October 10,      October 4,      October 10,      October 4,
                                   2009            2008             2009            2008         FY 2008 (1)        FY 2007
Operating Results:
Total net sales (in 000s)      $  1,262,576     $ 1,187,952     $  4,269,056     $ 3,949,867     $  5,142,255     $ 4,844,404
Total commercial net sales
(in 000s)                      $    409,039     $   359,420     $  1,358,065     $ 1,155,588     $  1,515,371     $ 1,290,602
Comparable store net sales
growth (2)                             4.7%          (0.1%)             6.1%            1.1%             1.5%            0.7%
  DIY comparable store net
sales growth (2)                       1.7%          (4.1%)             2.4%          (2.6%)           (2.3%)          (1.1%)
  Commercial comparable
store net sales growth (2)            11.8%           10.8%            14.9%           11.6%            12.1%            6.2%
Gross profit (3)(4)                   49.2%           47.3%            49.1%           47.4%            46.7%           46.6%
SG&A (3)                              40.9%           39.3%            39.8%           38.1%            38.6%           38.0%
Operating profit (5)                   8.3%            8.1%             9.3%            9.3%             8.1%            8.6%
Diluted earnings per share
(6)                            $       0.65     $      0.58     $       2.46     $      2.23     $       2.49     $      2.28

Key Statistics and Metrics:
Number of stores, end of
period                                3,418           3,352            3,418           3,352            3,368           3,261
Total store square footage,
end of period (in 000s)              24,952          24,627           24,952          24,627           24,711          23,982
Total Team Members, end of
period                               49,341          47,886           49,341          47,886           47,582          44,141
Average net sales per square
foot (7)(8)                    $        217     $       207     $        217     $       207     $        211     $       207
Operating income per Team
Member (in 000s) (7)(9)        $       9.13     $      9.25     $       9.13     $      9.25     $       9.02     $      9.40
SG&A expenses per store (in
000s) (3)(7)(10)               $        643     $       584     $        643     $       584     $        599     $       581
Gross margin return on
inventory (3)(7)(11)           $       3.95     $      3.46     $       3.95     $      3.46     $       3.47     $      3.29

(1) Our fiscal year 2008 included 53 weeks.

(2) Comparable store sales is calculated based on the change in net sales starting once a store has been open for 13 complete accounting periods (each period represents four weeks). Relocations are included in comparable store sales from the original date of opening. Fiscal 2008 comparable store sales exclude sales from the 53rd week.

(3) Effective first quarter 2009, the Company implemented a change in accounting principle for costs included in inventory. Accordingly, the Company has retrospectively applied the change in accounting principle to all prior periods presented herein related to cost of sales and SG&A. SG&A includes the impact of store divestitures for the twelve and forty week periods ended October 10, 2009 of $7.1 million and $22.2 million, respectively.

(4) Excluding the gross profit impact of the 53rd week of fiscal 2008 of approximately $44.1 million and a $37.5 million non-cash obsolete inventory write-down in the fourth quarter of fiscal 2008, gross profit was 47.3% for fiscal year 2008.

(5) Excluding the operating income impact of the 53rd week of fiscal 2008 of approximately $15.8 million and a $37.5 million non-cash obsolete inventory write-down in the fourth quarter of fiscal 2008, operating profit was 8.6% for fiscal year 2008.

(6) Excluding the net income impact of the 53rd week of fiscal 2008 of approximately $9.6 million and a $23.7 million non-cash obsolete inventory write-down in the fourth quarter of fiscal 2008, diluted earnings per share was $2.64 for fiscal year 2008. Our diluted earnings per share reported for the twelve week period ended October 4, 2008 and FY 2008 have been reduced by $0.01 as a result of the adoption of the two-class method. Refer to Footnote 12 of our condensed consolidated financial statements for further discussion of this adoption.

(7) These financial metrics presented for each quarter are calculated on an annual basis and accordingly reflect the last four fiscal quarters completed.

(8) Average net sales per square foot is calculated as net sales divided by the average of the beginning and ending total store square footage for the respective period. Excluding the net sales impact of the 53rd week of fiscal 2008 of approximately $89.0 million, average net sales per square foot in the third quarter of fiscal 2009 and fourth

quarter and fiscal year of 2008 were $217 and $208, respectively.

(9) Operating income per Team Member is calculated as operating income divided by an average of beginning and ending number of team members. Operating income per team member in the third quarter of fiscal 2009 was $10.04 excluding the impact of store divestitures for the forty week period ended October 10, 2009 of approximately $22.2 million, impact of the 53rd week of fiscal 2008 and inventory write-down in fiscal 2008. Operating income per Team Member for fiscal year of 2008 was $9.49 excluding the impact of the 53rd week of fiscal 2008 and inventory write-down in fiscal 2008.

(10) SG&A per store is calculated as total SG&A divided by the average of beginning and ending store count. SG&A expenses per store in third quarter fiscal 2009 were $629 excluding the impact of store divestitures for the forty week period ended October 10, 2009 of approximately $22.2 million and impact of the 53rd week of fiscal 2008 of approximately $28.4 million. SG&A expenses per store for fiscal year 2008 were $590 excluding the impact of the 53rd week of fiscal 2008 of approximately $28.4 million.

(11) Gross margin return on inventory is calculated as gross profit divided by an average of beginning and ending inventory, net of accounts payable and financed vendor accounts payable. Excluding the impact of the 53rd week of fiscal 2008 and inventory write-down in the fourth quarter of fiscal 2008, gross margin return on inventory in third quarter fiscal 2009 and fiscal year 2008 was $3.83 and $3.37, respectively.

Store Development by Segment

UAAP Segment

At October 10, 2009, we operated 3,267 AAP stores within the United States, Puerto Rico and the Virgin Islands. We operated 3,239 stores throughout 39 states in the Northeastern, Southeastern and Midwestern regions of the United States. These stores operated under the "Advance Auto Parts" trade name except for certain stores in the state of Florida, which operated under the "Advance Discount Auto Parts" trade name. These stores offer a broad selection of brand name and proprietary automotive replacement parts, accessories and maintenance items for domestic and imported cars and light trucks. In addition, we operated 28 stores under the "Western Auto" and "Advance Auto Parts" trade names, located in Puerto Rico and the Virgin Islands.

The following table sets forth information about our AAP stores during the twelve and forty weeks ended October 10, 2009, including the number of new, closed and relocated stores and stores with Commercial programs that deliver products to our Commercial customers' place of business. We lease approximately 81% of our AAP stores.

                                              Twelve                 Forty
                                           Weeks Ended            Weeks Ended
. . .