19th May 2005 - Advanced AutoParts Announces Record Revenue and Earnings for 1st Quarter

Advance Auto Parts, Inc., a leading automotive aftermarket retailer of parts, accessories, batteries and maintenance items, today announced record revenue and earnings for its first quarter ended April 23, 2005.  Earnings per diluted share for the first quarter were $0.94, a 38% increase compared to earnings per diluted share of $0.68 for the first quarter last year.  Net sales increased 12.1% in the quarter to $1.26 billion compared to $1.12 billion in the first quarter last year.  Same-store sales grew 9.2% in the quarter, comprised of 5.1% do-it-yourself (DIY) same-store sales and 27.2% do-it-for-me (DIFM) same-store sales.

"Our team once again produced strong sales and earnings growth during the quarter," said President and Chief Executive Officer Michael Coppola.  "We are seeing strong demand from both our retail and commercial customers.  We continue to focus on having the newest, most vibrant stores in our industry, with the right people, parts, and prices available to serve our customers' automotive needs."

First quarter gross margin improved to 47.8% of net sales, compared to 46.4% in the same quarter last year, primarily reflecting the positive impact of a more-favorable mix of higher-margin categories, as well as the impact of category management and supply-chain initiatives.  Selling, general and administrative (SG&A) expenses improved to 38.2% of net sales, compared to 38.4% in the first quarter last year, primarily as a result of the leverage caused by our higher comp-store sales.  First quarter operating margin rose to 9.6% of net sales compared to 8.0% in the first quarter last year.

Store Openings

During the first quarter, the Company opened 26 new stores, closed three stores, relocated 19 existing stores, and converted 68 stores to Advance's 2010 format.  The Company continues to expect an acceleration in store openings, with 150-175 new stores planned for 2005.  In addition, the Company celebrated its entry into New Mexico, with the grand opening of its Clovis, NM store last month.  This expands Advance's footprint to 40 states in the continental United States (in addition to its stores in Puerto Rico and the Virgin Islands).  The Company operated 2,675 stores as of April 23, 2005, of which 1,266 were the Company's new 2010-format stores.

Guidance

As a result of its strong first-quarter results, the Company is raising its earnings per diluted share guidance for fiscal 2005 to a range of $3.04 to $3.14, representing an increase of 22% to 26% over fiscal 2004.  For the second quarter, the Company is reiterating its earnings per diluted share guidance in the range of $0.82 to $0.88, representing an increase of 17% to 26% over earnings per diluted share of $0.70 in the second quarter last year. For the third quarter, the Company is initiating earnings per diluted share guidance in the range of $0.78 to $0.83, representing an increase of 15% to 22% over earnings per diluted share of $0.68 in the third quarter last year.

Mr. Coppola continued: "Our performance reflects continued execution toward achieving our four key goals:  1) Improving sales per store, 2) Expanding our operating margin, 3) Generating strong free cash flow, and 4) Improving our return on invested capital.  We continue to see tremendous opportunity to drive improved performance, by continuing to implement our strategic initiatives and leveraging positive industry dynamics."

"We remain committed to our goal of increasing our annual earnings per share 20% or more over the next several years," Mr. Coppola said.  "Our philosophy of investing for the long term is paying off, and we will continue to invest in our people, brand, and business to sustain our growth.  We are pleased by our strong start to 2005, and believe we are well positioned to continue growing our market share."

Annual Meeting Announcements

The Company's Annual Meeting of Stockholders was held earlier today.  At the meeting, stockholders:

The Company's planned CEO transition from Larry Castellani to Mike Coppola also officially took place.  Mr. Castellani continues to serve as the Company's Chairman of the Board.

"It has been my privilege to lead this fine company for the past five years," Mr. Castellani said.  "I can't think of a more able successor than Mike Coppola to drive Advance Auto Parts to even greater success in the years ahead.  It has been a pleasure to work with such a dedicated and talented team, and I will continue to do so on a strategic basis as non-executive Chairman of the Board.  I thank each and every member of our team for their hard work and determination to serve our customers better than anyone."

About Advance Auto Parts

Headquartered in Roanoke, Va., Advance Auto Parts is the second-largest automotive aftermarket retailer of parts, accessories, batteries and maintenance items, in the United States, based on sales and store count.  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, developments or results, 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 sales per store, operating margin, free cash flow, return on invested capital, and earnings per share for second quarter, third quarter and fiscal year 2005.

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, and other factors disclosed in the Company's 10-K for the fiscal year ended January 1, 2005, on file with the Securities and Exchange Commission.   Actual results may materially differ from anticipated results described in these forward-looking statements.  The Company intends these forward-looking statements to speak only as of the time of the news release and does not undertake to update or revise them, as more information becomes available.

Source: Advanced AutoParts Press Release