Welcome to the National Performance Dashboard User Support Training

1. Welcome to the National Performance Dashboard User Support Training

2. The National Performance Dashboard Training Goals Upon Completion of the National Performance Dashboard Training (NPD), GMs will be able to: • Define: • Full Potential • Peer Groups • Quartiles • Bonus Plan • Define and Understand the Key Metrics • Understand the features of the NPD • Demonstrate the usefulness of the NPD as a tool to help identify the behaviors that are then to be managed • Manage to Full Potential

3. Introduction What:The National Performance Dashboard Why: To focus efforts on areas of the business that need to perform to Full Potential. Who: Store, District, Regional and Area Senior Vice Presidents; other users will include business leaders and finance.

4. What is the National Performance Dashboard? A technology-enabled platform which will provide visibility to the key Metrics driving growth and value for Advance Auto Parts. Users will have the ability to drill down to specific locations found within Advance Auto Parts where they will receive snapshots of an area, region, district or store’s performance.

5. Access NPD through StoreNet Users will be able to access the NPD from this link on StoreNet.

6. The National Performance Dashboard Tour

7. Login Screen • All Store Team Members: Log in with your e-Learning User ID and password. • All Non-Store Team Members: Log in with your Network User ID and password.

8. NPD Navigation Landing Page Overview NPD Header NPD Content NPD Footer

9. The National Performance Dashboard Navigation Sales Growth Drill Down • Sales Growth Metrics • Customer Average • Attachment Rate Dollar • Attachment Rate Transactions • Transaction Count • Unit per Transaction (UPT)

10. The National Performance Dashboard Header Training Materials • Time Dimensions • Prior Day (equals yesterday's data) • WTD (all data for the current week up to yesterday). The week is • defined as Sunday thru Saturday • Prior Week (entire previous week data) • PTD (all data from the current period up to yesterday) • Prior Period (entire previous period data) • QTD (all data for current quarter up to yesterday) • Prior Quarter (entire previous quarter data) • YTD (all data for current year up to yesterday) • Prior Year (all data for entire previous year)

11. Name of Metric For list of Metrics and definitions see slides 44-64 Prior Year- last fiscal year (Company calendar) Status Indicator-Green = meets or exceeds target Red= does not meet target Yellow= meets target Actual- reflection of performance of the selected business unit over the time period indicated Variance- % difference between Target and Actual Target- The desired goal

12. Top Store- The store with the best result in the peer group Peer Group- The 25 distinct Peer Groups are determined by: Net DIY Potential Net Commercial Potential DIY Competitive Position Inventory Top Performer- The best result among the stores in the peer group Next Quartile- The result needed to achieve a jump to the next quartile, (for example, moving from 3rd quartile to 2nd quartile)

13. 4 Wk. Trend Performance activity over a rolling 4 week period. One for each DIY, DIFM and Total store Trend Key Indicates a positive trend Indicates a flat trend Indicates a declining trend

14. The National Performance Dashboard View: DMs, RVPs, SVPs

15. Results represent total District, Region or Area

16. Each user will get two additional tabs based on their position in the retail hierarchy: For an SVP: Sales & Margin - Region Sales Growth - Region For an RVP: Sales and Margin - District Sales Growth - District  DM View

17. For RVP and SVPs: National Performance Dashboard- Store Takes user to the Store NPD For DMs: Link to selected Store’s Landing Page

18. Back to Store Detail returns user to Store Details Store Landing Page

19. The National Performance Dashboard View: Corporate

20. Corporate User- All Tabs Selecting Area begins the Drill-in-Place process All Choices Resets the page to display all Areas National Performance Dashboard- Store Takes user to the Store NPD

21. Drill-in-Place Allows the user to drill down the Navigational Hierarchy: Region, District, Store

22. Prompt Navigation Select Area from drop down and click “Go” Prompt Navigation After Area is selected Region drop down will contain regions within that area The Default button will refresh the prompts to the default values (Area 9, Region 99)

23. User Support

24. Technical Questions

25. Functional Questions

26. The National Performance Dashboard Overview

27. Why the National Performance Dashboard? • One page view of performance • Focus on key performance measures only 1. SIMPLICITY 2. SPEED TO INSIGHT • Daily view of performance • Absolute vs. relative performance • Visibility to trends 3. FULL POTENTIAL ALIGNMENT • Performance relative to full potential targets • Sales Growth, Gross Margin %, Labor, Calibration, and Traction 4. CONSISTENCY WITH SOCIAL SYSTEM • Performance relative to Top Performer within peer group • Quartile Position • Bonus Tracking

28. What The National Performance Dashboard Can Do • Generateperformance Metrics • Enable'cross module' analysis of data and results • Provide grouped metrics and analytical data • ManagetoFull Potential

29. Full Potential

30. Full Potential Definition: The total (DIY and Commercial) dollars within a store’s relative market; reduced to reflect level of competition that exists in the market. How: A store achieves Full Potential by executing its standard operating procedures at a continuous high level to serve the customer better than the competition. Result: When stores operate at Full Potential the company achieves its financial goal of $10 Billion.

31. Peer Groups

32. Why peer group stores: example of how we miss potential today ILLUSTRATIVE Rev growth: 6.2% Competition: High Comm’l potl: Low DIY RMS: Challenger Square feet: 6.9K Inventory: L2 Rev growth: 0.6% Competition: Low Comm’l potl: High DIY RMS: Leader Square feet: 8.1K Inventory: L4 …but one store significantly underperforms Store A peer group average is $1.2M Store B peer group average is $2.1M Store A Store B Which store is underperforming? Rev: $1.79M DIY/DIFM: 69/31 Op profit: $218K Store age: 7 years SM rating: 2 Rev: $1.76M DIY/DIFM: 70/30 Op profit: $224K Store age: 12 years SM rating: 3 Current performance is ‘above average’…

33. Peer Groups - Introduction How are you performingvs. comparable stores at AAP? That’s where Peer Groups come into play. Why Peer Groups? Is it fair to compare sales performance of 2 stores in Roanoke that have different levels of demographics, competition, and inventory level...No! Peer Group Criteria Therefore we have created peer groups that compare “like” stores across the footprint of AAP locations based on: Net DIY Potential Net Commercial Potential DIY Competitive Position Inventory Level There are 25 Peer Groups in total and no single peer group is viewed as better than another peer group. Introduction to Quartiles: Performance is measured within the Peer Group through quartiles (Quartile 1 through Quartile 4 – measured “highest to lowest” revenue output) Page 33

34. Peer Groups – How We Define “Like” Stores Net DIY Potential - Total dollar amount of retail business in a stores area that Advance can “achieve” Net Commercial Potential - Total dollar amount of commercial business in a stores area that Advance can “achieve” DIY Competitive Position - Represents a store’s relative market share in a given trade area plus the degree of competition in the market Inventory - Amount of merchandise or stock a store has for sale as indicated by Inventory Levels 1 – 5 (LAW) Page 34

35. Quartiles

36. Quartiles Within a Peer Group, stores with the highest level of revenue comprise the 1st Quartile and the lowest revenue producing stores comprise the 4th Quartile Therefore, the 4th Quartile stores are producing the lowest level of revenue compared to other “like” stores and have the greatest opportunity to grow their revenue base Based on this opportunity, the 4th Quartile stores are assigned the highest Comp Sales Growth target as see on Figure 1 (next page) Page 36

37. Quartiles • Top quartile stores are closer to achieving Full Potential than bottom quartile stores so the sales growth expectations are scaled Figure 1 Goal: Enhance AAP Growth Rate % Page 37

38. Bonus Plan

39. Bonus Plan To earn a bonus, stores must achieve the following: 1) Grow sales over last year. 2) Ensure profitable growth by achieving Gross Margin Goal. 3) Achieve Labor Hour Goals. (General Managers only) Your bonus is uncapped — Advance pays you a bonus every period that you have profitable growth, if the above conditions are met.

40. The National Performance Dashboard Metrics

41. The National Performance Dashboard Metrics Metric: The measurement indicators or measures to determine performance • Sales • Comp or Sales Comp (Retail & Commercial) • Sales Dollar • Transactions (Retail) • Attachment Rate Dollar (Retail) • Attachment Rate Transaction (Retail) • Margin • Controllable Profit • POS Gross Margin (Retail & Commercial)

42. The National Performance Dashboard Metrics • Labor • Issued Hours • Sales per Labor Hour (Labor Productivity) • Unauthorized Overtime • Customer • Customer Traction Score (DIY & Commercial) • Team Member • Calibration Scores • Turnover

43. Sales

44. Comp or Sales Comp (Retail) Year over year sales growth for stores open a minimum of 13 periods. It is the key indicator of organic retail sales growth. Calculation Comp=This Year’s Sales Last Year’s Sales - 1

45. Comp or Sales Comp (Commercial) Year over year commercial sales growth for stores open a minimum of 13 periods. It is the key indicator of organic commercial sales growth. Calculation Comp =This Year’s Sales Last Year’s Sales - 1

46. Attachment Rate Dollar Category qualified attachment dollars as a percent of total category sales. Calculation Attachment Rate Dollar = Category qualified attachment dollars Parent Item sales

47. Attachment Rate Transaction Percent of category transactions with qualified attachments. CalculationAttachment Rate Transaction = Category Transactions with qualified attachments Total category transactions

48. Margin

49. Controllable Profit Gross Margin less labor and other controllable expenses as defined on the store Profit and Loss statement.

50. POS Gross Margin (Retail) POS Gross Margin %: Total Sales minus cost of goods sold divided by the total Sales, expressed as a percentage. Calculation POS GM%= Sales – Cost of Good Sold Total Sales